The sudden announcement of President Donald Trump’s 25% tariffs on Indian goods from August 1, with an additional but unspecified “penalty” for its defence and energy imports from Russia has put a lot of stress on the Narendra Modi government.
This move, coming just ahead of an impending trade agreement, could pull down the economy and cast a shadow on India-US ties, experts say. Former Union Minister and senior Congress leader P Chidambaram, who has served as Finance minister for four terms and was also the Commerce and Industry minister, talks to The Indian Express of the tightrope that India must now walk on the negotiations. He speaks of the Operation Sindoor debate in Parliament as well.
Excerpts:
How do you see President Trump’s tariffs and penalty on certain imports from Russia?
He (Trump) has set August 1 as a deadline. What I gather is the negotiations are not going forward in the way that we expect. But he is a very impulsive President. Therefore, he announced it two days before the August 1 deadline. Be that as it may… I just read that in the last few hours, he has said ‘Whether we will charge the tariff that I announced’ and ‘We will let you know by this week’… Whatever he meant by that. Therefore, although he has announced a 25% tariff, whether he will stick to that, I cannot say.
How does India navigate ties with a President who you call impulsive?
France, the UK and some Latin American countries are dealing with President Trump and the United States. They do not take a defiant attitude. At the same time, they do not bend over. We have to maintain our position and tell the United States that we are willing to negotiate.
Negotiating a trade agreement with the United States is not easy. It is painstaking. The big obstacle is that we had — and in many cases still have — is high tax. As a result of that, the trade balance between the United States and India is almost $45 billion in our favour. We can say the same thing about our trade with other countries, where the trade balances in favor of the other country. But that is part of the world of commerce… We will have to deal with it. We do not have to bend over. At the same time, we do not have to be defiant.
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Japan and Korea have trade deals with the US. Is that the best way to navigate the situation?
There is a difference. Japan is a developed country. South Korea is a developed country. They have a wider basket of exports. They have also freed imports to a large extent.
Therefore, it is easier for them to open up a little more in exchange for the United States opening up a little more. We were a closed economy. In fact, when I took over as Commerce minister, we were completely closed. We have opened it significantly but not to the extent of developed countries.
It is more difficult for us to enter into a trade agreement with the United States than Japan and South Korea. There are other countries in the same league as India. They will also find it difficult to enter into trade agreements with the United States. But we have to persevere, and we have to go through the exercise.
Some countries have announced reciprocal tariffs.
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Those are bargaining chips. China has done it. That is a kind of a bluff or bravado which President Trump also indulges in.
So, should India avoid that route?
No, we are not in the position to do that. We have to negotiate. We have to make it plain that we will negotiate.
Coming to the debate in Parliament on Operation Sindoor and its aftermath… How do you see the discourse? And are there unanswered questions after three days of debate?
The unanswered question is: Why did we accept the ceasefire immediately and without conditions? See the Armed forces have made sacrifices, fought bravely and made sacrifices. They may not have lost any lives, but they have lost military hardware. If the Armed forces made some military gains, no doubt about it. I acknowledged it in my intervention in Parliament… But if you accepted a ceasefire — let us assume voluntarily — why did you accept it immediately and without conditions? That is the question I would ask.
What conditions?
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I do not know. The military must be involved. The Foreign Ministry must be involved. The Home Ministry must be involved. And the Water Ministry must be involved. And we should have made a list of demands and told Pakistan ‘you indicate whether these demands can be met partially or wholly, and then we will agree to a ceasefire’. But without being in government, without knowing the actual situation on the ground… How can I spell out the conditions…
But an unconditional ceasefire and an immediate ceasefire… Seems to me, we are frittering away the military gains.
The Opposition alleges US president played a role in bringing about a ceasefire?
That is a separate question. I do not want to jump to that conclusion, but that is a separate question. Here is a President of the United States saying — for the 31st time today — that he is the one who brought about the end of the war and the ceasefire.
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Now, the government rebukes the Opposition. I do not want you to rebuke President Trump, at least rebut him. This is the demand. Stand up in Parliament and say ‘President Trump did not speak to me, did not mediate, did not bring about a ceasefire. It is our decision, one we took voluntarily’.
Of course, President Trump will say something after that, but at least for Indian parliament and Indian public opinion, that statement must be made. So, Mr Rahul Gandhi is absolutely right. He is saying that it should be said in Parliament. That is all.
In Lok Sabha, Home Minister Amit Shah referred to a recent interview you gave to The Quint in which you said the BJP administration was giving a clean chit to Pakistan. You said that the Pahalgam attackers could be homegrown terrorists.
What did I say? What has the NIA (National Investigation Agency) investigation revealed? They are unwilling to disclose what the NIA has done all these weeks. Have they identified the terrorists? And I said give us what the NIA has found.
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That is not doubting the NIA… Just asking for information. I know — and I believe — that there are infiltrating terrorists. I said so in the Rajya Sabha. There are Pakistani infiltrating terrorists, but they are also India-based terrorists. Take Pahalgam… On April 26, the J&K administration demolished a number of houses on the ground that were owned by terrorists.
Now, who are those terrorists? If they own houses in India, they must be India-based terrorists. Secondly, in June, the NIA arrested two people. The names have come out today… On the ground, they were harboring the three suspected infiltrating terrorists. Who are those two guys? They are India-based terrorists, or India based extremists.
The Mumbai Suburban train attack (in 2006)… Who committed that? India-based militants. Mumbai Zaveri Bazaar (blast) in 2011 was India-based terrorists. Therefore, I maintain that there are infiltrating terrorists as well as India-based terrorists. Just tell us what the NIA has found. The government has now neutralised three people, and the Home Minister announced it in Parliament. I accepted.
During the debate in both the Houses, senior ministers hit out at the Congress to argue that the party had always been soft on Pakistan and terrorism. How do you see that kind of a counter attack?
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This is not a counter attack. For the people of India, these are completely irrelevant. You start from 1947 and say Congress gave away Pakistan. Anybody who makes that statement has no idea of the historical events between 1942 to 1947. Then, you say we gave away PoK (Pakistan Occupied Kashmir). Again, the person who says that has no understanding, no knowledge, of historical events.
At the end of this three-day debate on Operation Sindoor, is the Opposition satisfied?
As many members have said… Not only the Congress, but the DMK, TMC, CPM, AAP, RJD… They have asked a number of questions, and according to them, they have not been answered satisfactorily.
*This week, there were acquittals in two big terror cases — the Mumbai train bombings and the Malegaon bomb blast. It was under your tenure as Home Minister that NIA was set up. How do you see the challenge when high-profile terror cases fall like this in courts.
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Because I was in the Home ministry, I have said that no political comment is required in a criminal court proceeding. I am a trained lawyer. I believe that the judiciary is independent. The prosecution is independent. The investigating officer is independent. In these cases, the cases were registered and investigated initially by the Maharashtra police. I think one case was transferred to the NIA. So, where is the political comment on the criminal court proceeding or the outcome of the criminal court case?