Another week has begun on what has, so far, been a globe-shaking Trump presidency. Opening the week in his trademark style, US president Donald Trump has announced 25 percent steel and aluminium tariffs and also promised tit-for-tat levies over the next two or three days.
The latest shots in an escalating trade war are being fired as Prime Minister Narendra Modi heads to Washington on a two-day visit beginning February 12.
Modi said on February 10 he had a "very warm recollection of working with the US President in his first term". The visit to the US would be an opportunity to deepen India-US partnership in areas such as technology, trade and defence, the Prime Minister said in a statement.
According to reports, ahead of the visit, India may offer more tariff cuts to its largest trading partner. These would be in addition to concessions made on import duties in the Budget 2025.
A “mini trade deal” could be on offer when Modi, who has been described as “fantastic” by the mercurial American president, is in the United States.
But Trump has also referred to India as “tariff king” on more than one occasion and hasn’t taken a kind view of BRICS, of which India is a founding member, trying to replace dollar as the dominant currency.
India has denied considering such as a move. Late last year at the Doha Forum in Qatar, external affairs minister S Jaishankar said, "I am not exactly sure what was the trigger for it, but we've always said that India has never been for de-dollarisation. Right now, there is no proposal to have a Brics currency."
Also read: Looking forward to meeting my friend Donald Trump: PM Modi ahead of US visit
The BRICS grouping – with Brazil, Russia, India, China, and South Africa as original members but now expanded to include countries like the UAE and Indonesia – have promoted trade in local currencies to reduce reliance on the US dollar.
“The idea that the BRICS Countries are trying to move away from the Dollar, while we stand by and watch, is OVER… We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty US Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful US Economy. They can go find another sucker Nation…,” Trump posted on his Truth Social network last month.
After taking office on January 20, Trump’s whirl of decisions, many of them unprecedented, have upended American administration, roiled the markets, putting allies and rivals on the edge and he is not even completed a month in office.
Trump is also keen that India buys more defence equipment from America.
India is bolstering its defence capabilities and Modi, who will be in France for an AI summit before heading to the US, is looking to purchase more fighter aircraft such the Rafale and also sign an agreement to make three more submarines under the “Make in India” programme in collaboration with French firms.
The United States has sent a contingent of military aircraft that includes F-16s, F-35s and a B-1 bomber to Aero India 2025 show in Bengaluru where a Russian Su-57 fifth generation fighter is also on display.
This is being seen as the options available for India, one of the biggest defence importers, as it looks to modernise and indigenise its military.
Although the US has not offered to sell F-35s, Russians are open to co-production of Su-57s with India.
India is also planning to make its own fifth generation fighter, the Advanced Medium Combat Aircraft or AMCA that is expected to see its first prototype fly later this decade. Until then India has to plan for a situation where China has a large fleet of fifth and sixth generation fighter jets in service. Some of these aircraft are also being eyed by Pakistan for induction into its air force in some years.
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