The very basis of free trade deal is at stake: RSS affiliate Swadeshi Jagaran Manch on Trump’s penalty

Ashwani Mahajan, is also a Professor at the Department of Economics, PGDAV College of the Delhi University

Any bilateral agreement should stay focused on matters of trade alone, and any attempt to bring non-trade aspects in the ambit undermines the very foundation of the free trade order, said Ashwani Mahajan, the National Co-Convener of Swadeshi Jagaran Manch (SJM), an affiliate of Rashtriya Swayamsevak Sangh (RSS).

Discussions for any trade deal should remain strictly confined to matters of trade and must not even be extended to matters such as the environment or labour, Mahajan said while speaking to Moneycontrol, in response to US President Trump’s unspecified penalty on India citing trade ties with Russia, over and above a 25 percent tariff.

Mahajan also said that India is committed to buying defence equipment and crude oil at the cheapest price wherever it gets it from, to ensure domestic inflation is kept in check.

“It is not just about arms and energy; it is about Make in India. Today’s India is not the same as it was 30 years ago, we are emerging as a global power in arms production, we had demonstrated to the world we are the best during Operation Sindoor,” Mahajan said.

Trump on July 30 imposed a 25 percent tariff on Indian exports, along with a penalty for Russian energy and arms purchase, putting India at a disadvantage as compared to other Asian competitors.

Mahajan said this move would hurt the US more than India. Read More

“What I feel is if you go beyond the rules of the game, then obviously things will not move in the optimum manner. This very fact that that US has been trying to raise tariffs, it will hurt US itself with inflation rising and then leading to hike in interest rates, which will jeopardise their whole ecosystem. Using it as a threat is okay, but implementing it will hurt the US economy sooner or later,” Mahajan told Moneycontrol. Read More

While India and the US are negotiating the first tranche of a Bilateral Trade Agreement (BTA) aimed at fall of this year, efforts to agree on a mini-version by August to avoid steeper reciprocal tariffs have not fructified.

A team of American negotiators are expected to visit New Delhi for another round of trade talks in the middle of August.

While adding that India should continue to engage with the US for a trade agreement, Mahajan suggested the need to diversify India’s exports by tapping newer markets.

“Gain from trade, reorientation is natural. We can diversify to other markets. Even US is compelled to buy from us, otherwise they will have to buy from China, while European Union cannot give them competitive prices.”

Mahajan said any deal between India and the US should be negotiated on an equal footing. “We have to keep on talking for a trade deal (with the US) by sitting on the table and deciding and a deal on equal terms.”

Read More: India-US trade deal: It’s time to seize the moment

Reacting to Trump’s tariff and penalty, the Indian government on July 30 said that it attaches highest importance to protecting Indian farmers, entrepreneurs and MSMEs, while staying committed to negotiate a fair and balanced trade pact with the US.