India–US Trade Rift: What Went Wrong and the Road Ahead

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Hello and welcome to the Core Reports Weekend Edition. We are obviously talking about the spat between India and the United States bordering on trade or is it more than that? The question that we are really trying to address is what's the way forward?

Can we extricate this or is this inextricable from where we are today? So that means there are two parts. If it is extricable, then what does India need to do?

If it is not because we want to harden our position, take a different tack, then equally what we need to do. But to also put this in backdrop or rather to approach it, we need to understand why we are here to start with, as in why did things go wrong? Why was a deal which was seemingly on the table yanked off at the last moment?

Is it only because of what US President Donald Trump felt he needed to do at the last moment or there was something else? And what are the lessons that we need to know even as casual observers to what happens in the somewhat opaque world of international trade negotiations? But that's really what led to this.

And the larger question, just to recap once again, is to understand what we need to do here on. My guests for today to do that are Ambassador Sanjay Bhattacharya, former Secretary of the Ministry of External Affairs, Indrani Bakshi, CEO of the Anantha Aspin Centre, columnist with the Times of India on Foreign Affairs, and Gaurav Sansanwal, Fellow for the Chair on India and Emerging Asia Economics at the Centre for Strategic and International Studies, CSIS, in Washington, D.C., both Indrani and the Ambassador join me from Delhi. Thank you all for joining me. So let's start off with a brief set of comments from all of you on why we are where we are. So Ambassador, it's over to you.

Sanjay Bhattacharyya

Thank you. I think this is not entirely unexpected in trade negotiations. Let me say that as the first point.

The fact that, you know, the stakes have been raised so suddenly, but with a certain time window that has been provided, leaves me to understand that we could perhaps clinch a deal. But there are a couple of complications because there are two aspects that have now got into this particular perspective. One is the pure trade on which, you know, after Prime Minister Modi visited D.C. and met with President Donald Trump, we had announced that we would start FTA negotiations, which are ongoing as a matter of fact. But the second one, which is the more complex thing, is the introduction of the relationship with Russia and particularly our purchase of oil and maybe even defence supplies. So I think there are certain complications in this, but I'm not surprised. I think there's a lot of hard work to be done.

We need cool minds and negotiations will be the way forward because these are two large economies, two large democracies, the largest and the most prosperous. And we have committed ourselves towards serving the future of humanity. So that is a very strong strategic partnership to which both of us are wedded on a bipartisan level.

So we will find a solution.

And we'll come back to how we could find that solution. But if I can come back to the question or the sub question is, how and why did we reach here at this point of direct confrontation versus what seemed to be relatively smooth negotiations which lasted five rounds in the last few months?

Sanjay Bhattacharyya

I think there were certain issues on trade negotiations itself and there were certain concessions that the Americans wanted, which proved to be somewhat crossing the red line. Or, you know, they were projected as crossing the red line. And of course, all this is subject to negotiation, you know, whether it is the agriculture chapter or it is, you know, the dairy or certain other things.

You know, those can all be negotiated as far as I can see. And from our experience of trade negotiations, these can be worked out. But I think there has been a certain change in the mind of the US president regarding the role of Russia.

And this has particularly come in the last month or more during particularly after the NATO summit. And we do see a certain hardening of position vis-a-vis Russia. And so there is a sense to bring about this new linkage, which is not entirely connected with trade, although there are certain interlocutors on the US side who have tried to suggest that.

So I think we see two complicating situations which have kind of conjoined at this point of time. But the fact that an ultimatum has been given to me suggests that, you know, we are close and we can clinch the deal. This often happens, by the way.

OK, OK, we'll come back to that. Indrani, why are we here?

Indrani Bagchi

Well, I think there are two parallel tracks which have converged. One is the trade negotiations, which, as Ambassador Bhattacharya mentioned, sort of went a little off, even though they were, they seemed to have been going pretty well. And from my understanding, a deal that was agreed to by both sides was on the president's table a little over two weeks ago, and the president looked at it and jumped it and said, I want more.

We all know where he wants more, which is in areas of Agri, etc. That's on the one part. The Russia bit, I think, is a way of, you know, when you, I'm sure there is some phrase or proverb in old society, but basically, if you want to get at one, you kind of beat up another.

And we are at this point, for the last two years, we have been the centre of the world's ire on fuelling Russia's war machine by buying oil. And this is not new. Donald Trump doesn't care about buying oil from Russia.

He wanted to make peace with Russia. He's friends with Putin. So beating us up is easy to do, because that is literally something that has, whether it's Lindsey Graham, whether it's the Europeans, they all think that beating up India is literally your best way forward.

The numbers can say what they want. But if you go back for the last two years, our foreign minister has been saying this for the last two years in every forum that you can find. It doesn't matter.

The Europeans and the Americans have convinced themselves that we are the problem. And it's not just this one. Remember in Trump one, Trump passed the CAATSA, where again, he went after India for buying the S-400 from Russia.

He didn't put sanctions on us then. We waived those sanctions. This time, he's basically, he wants Putin at the table.

He's got Putin at the table today. There is a Trump-Putin meeting in the next couple of days. I'd say just that's, so these are the two parallel tracks that have converged.

That's how we got here.

So you're saying that till the point that that sheaf of papers landed on his table, everything was smooth, which also suggests that most of the red lines, which, of course, the US trade representatives have been aware of for years, if not decades, were already addressed.

Indrani Bagchi

Well, even if you kick the can down the road, they had an agreement on a large number of sectors. I mean, India, which is so hesitant on trade, and we hate trade, actually, but we still offered a zero for zero on so many sectors. They didn't want a zero for zero.

They wanted a 10 percent baseline tariff. That went up to 15 percent. But even that, I think on a whole lot of sectors, we achieved agreement.

Agri, dairy, soy is always going to be difficult. And that is not today. That's been forever.

So everybody knows those red lines. We were almost there. And if we had a document, then we were definitely there.

That is no longer enough. Some Trump needs his MAGA voice, MAGA farmers to be assuaged. We need our farmers to be assuaged.

Those farmers, neither of those farmers see eye to eye.

So we have a problem. And that's a specific point which I'll come to in a moment. Gaurav, let me come to you.

So the question again is, how did we reach to this point where it's an open face-off?

Gaurav Sansanwal

Well, Govind, I think India is hard to be blamed for the change that has happened in the last few weeks. And I think there are many issues on the table, but I would, I think, structure it into two buckets as well. I think one is, in the last few decades, there was a lot of structured momentum in the relationship, which was basically premised on the fact that India is important as a security partner and not just as a commercial partner, even though the commercial promise of India is very high.

And so the investment in the India relationship from the US side was premised on those two realities, strategic partnership and commercial promise. And that's a great work you all over the last few decades have also done towards. But now we are seeing an attempt to try and correct the trade imbalance and reduce the trade deficit that the US has with India in a very short term manner.

And so we are seeing that kind of an attempt to quickly try and sell more to India, where there is some amount of misalignment between the trade and tariff policies and commercial market realities, because even if you were to reduce tariffs, a lot of American goods would still not be competitive in the Indian market space. So I think there is a little bit of that short term transactionalism here, which is coming in the way of a long term structured deal, which would have involved looking at what are the kind of goods that India can sell better than the US, labour intensive versus capital intensive, which was the structure in which the deal was to be negotiated for the last joint statement as well. But I think the second issue here, which has come up a little bit in the conversation as well, is I think that there is a lack of India bench strength in the administration right now, which is why some of the red lines that we are talking about and political sensitivities that we are talking about, while historically, all of that has had a good amount of acknowledgement in the administration.

I think right now, you're seeing a time when there are not as many India hands, people haven't really been appointed yet on those beats. And I think that has also got something to do with a lack of meeting of minds here in terms of what is the art of possible in this negotiation. So I think I'll pause with that framework that somewhere the structural relationship is strained by short term expectations.

And then secondly, there is a bit of a lack of meeting of minds because of lack of India expertise in the administration in some ways right now.

And Ambassador, let me come back to you for that. So the lack of bench strength, as Gaurav says, can be on both sides.

What's your sense?

Sanjay Bhattacharyya

Well, to my mind, you know, if we look at the trade issue first, there was a clear undertaking and understanding on both sides that if you were to go for, you know, a zero sum game approach with a limited kind of mandate in which we are not looking at serious expansion of trade volume, there would be less of gains to be shared between the two sides. And that was one of the reasons why we actually agreed on setting a target of about 500 billion dollars by 2030, because once you expand the size of the cake, the possibility for sharing it becomes much more. And that would give both sides much more leeway over a period of time.

But at the same time, there was a certain imperative that we had to reach an agreement by autumn. And that basically meant that the negotiations would not be entirely comprehensive. There would be more of an early harvest kind of a scenario where you kind of catch the low hanging fruit.

And therefore, that was the mindset in which both sides initially went into the negotiations. Now, if you bring into that some of the old issues which require systemic changes, reforms, changes of the legal structure, those will definitely take much more time. And so they will tend to complicate this particular issue.

The other one is that I have a direct sense that, you know, and I think Indrani mentioned it as well, that there was a point of time when President Trump was really seen as one who was looking for a solution to the Russia-Ukraine issue. And his bonding with President Putin was seen as an advantage. But that somehow seems to have changed tack when Europeans held firm.

There is a sense of geopolitics which is now playing in because let's not forget that it was in the first Trump era that the Americans listed China as their principal adversary. And in between, while that was not entirely eroded during Biden's time, Russia, because of various things that happened in between, particularly Ukraine, became again the centre of the Western world, particularly NATO affections. And so this affection kind of spilled over into Trump's mentality.

Although you would recall initially and he still insists that, you know, the Europeans have to contribute more to their security needs. But there is a certain change that has come in Trump about the Russia-Ukraine situation. So I think this too have become the complicating factors to some extent.

OK, so you're saying that is the clear driver, motivator and instigator of most of what we're seeing. Indrani, let me come back to that. Yeah, go ahead.

Sanjay Bhattacharyya

Yeah, I just wanted to add one more point. I think, you know, we know that Trump is a mercurial president. He's a leader who often speaks by instinct.

And it is not always easy to, so to say, brief the president. But I think there needs to be a little more to be done by the officials. And perhaps that is something that has not entirely played its role.

Indrani, the question of bench strength and who is influencing Trump. So we had Bob Lighthizer in the previous administration. Now there's Navarro, who's, you know, I mean, making a clear point on trade, on tariffs and why a country like India needs to be taxed.

So one is, of course, within the US, whether these are the only voices and there's no counterbalancing even within the MAGA system. And the second is, really, who's, you know, in a position to counter that or influence that or convince from the India side and whether that bench strength is sufficient.

Indrani Bagchi

See, Bob Lighthizer talked about the fact that it was almost impossible to negotiate a trade deal with India. And he said, basically, Indian government has no, it sort of reflects the interests of the top 15 billionaires of the country. He was very clear on that.

He had a terrible relationship with Piyush Goyal because, in his view, Piyush Goyal did not deliver. The bench strength here comes into sort of focus because there is literally India innocence across Washington, D.C. today. I mean, most people have been thrown out of their offices, so there is no institutional memory.

And one of the consequences of that is the line that, you know, this official who put up this paper to J.D. Banks and President Trump on the night of the 9th of May that said that, oh, you know what? These people are going, the Pakistanis are going. And that triggered that whole cycle that we are all living off even today.

But it's not just the bench strength. It's how do you force the doors for India's traditional sectors? India has not worked on its traditional sectors, although I will refer you to a super piece by Hari Damodaran in Indian Express this morning, where he shows how India-U.S. agri-trade is surging. It's on a boom space. Now, there are things there that we can talk about later, but that apart. So how do you, what are your negotiators negotiating?

And what are the red lines that you have put in there? Are the red lines workable, movable, flexible? Those flexibilities have not been, we have not talked about it.

We don't even know about it. So the trade negotiations, any trade negotiations with India run aground very fast because we just don't have any space to negotiate. So that said, the Russia bit is a different part.

That brings the politics and that reflects the frustration of Trump not being able to get Putin to the table, not being able to end the war as he had promised. It is, as I kept, as I said earlier, it's easy to bash India to get to Russia. It's not easy to bash China to get to Russia.

There is a difference.

Okay, let me come to the geopolitical part of this now, before we come to what India should do. And Ambassador, let me come back to you and then I'll come to Gaurav. You know, so for those who are trying to understand what's going on, right now, the Indian Prime Minister Narendra Modi is set to visit Shanghai for the Shanghai Cooperation Organisation meetings.

President Putin has said that he might visit or there are reports that he might visit India very soon. Russia is obviously a very old ally. We've been buying defence equipment from them and we've been aligned with them in the past.

The arrival of Putin itself has changed things a little bit, but the relationship with the country obviously goes back. China is someone that we've been, you know, on, let's say, in a conflict mode for some time now and things seem to have thawed a little bit off late. And the U.S., with, of course, with whom things seem to be going well, is now, you know, again on the opposite side. But then the U.S. is also battling with many other countries, including its former allies. So someone was trying to make sense of this chessboard. What would you tell them about where India's role is in this today?

Sanjay Bhattacharyya

I think, you know, Indrani was pointing towards this particular aspect when she said that it's easy to bash India. And I think what really irks or riles many in the Western world is the fact that India seems to be unwilling to become an ally. That's the kind of a relationship that many in the West, particularly the United States, is really quite comfortable with.

So although you have a very strong and vibrant strategic partnership, not being an ally is also a bit of a difficulty. And therefore, I think sometimes it does cause certain complications in their understanding of what is this relationship about, as it does from the other side as well. And therefore, there are possibilities where there is room for misunderstanding or misjudgment.

You know, all these meetings that you mentioned, whether it is the SCO or the possibility of even a RIC meeting taking place, there is also another meeting that is supposed to happen in India, which is the Quad Summit is supposed to happen. And we don't really know as to whether it'll happen and in what form it will, because Mr. Trump does not often travel for these meetings. But these are the kind of options that are there.

And it is well understood in the world of diplomacy that when these meetings happen, there are bilaterals that happen apart from, you know, the staged mini laterals that we are attending. And so it's very likely that Prime Minister will meet with Xi Jinping. He will meet with Putin if he comes to Beijing.

And if Trump were to come for a Quad Summit, then there would be a possibility of that bilateral meeting as well. And in order to create climate for that, it is important that we don't have the atmospherics tarred or tarnished by, you know, other irritants. But they don't really and they should not affect the bilateral relations with others.

Right. And so, Gaurav, how are you seeing India on the chessboard, once again, to use that analogy at this point of time? And again, how would you explain this to someone?

Gaurav Sansanwal

Well, Govinda, I think, obviously, right now, India is trying to buy more time and looking for options and, you know, trying to as it negotiates this deal. But if you look at the last few years of the Modi administration, we see an effort towards trade openness and trade diversification, which is new. I agree with the ambassador and Indrani about, like, how India historically has been an irritant in the trade space.

But if we see just in the last few years, we've seen a consistent effort to try and sign deals. So we saw the deal happening with the UAE, with Australia, with EFTA. They're trying to negotiate with the Middle East.

And they just negotiated a big one with the UK. And yes, the content of many of those deals can be debated. But the consistent pattern in all of those was that India was trying to negotiate deals with complementary economies, with economies where its exporters could export out to or where it could get strategic technologies from.

And not exactly with competitive economies like China or even the Southeast Asia, to some extent. So the consistent pattern was that, yes, we have geopolitical relationships. But on the economic side, we would look to do deals with complementary economies like the Western powers and Middle East powers.

But not do deals with competitive economies like China, which is why RCEP failed a few years ago. But right now, obviously, because India is trying to do this negotiation and because, as you mentioned, what President Trump is doing with India is something that has happened or is happening to all major economies in the world. So I think in that sense, India is obviously trying to balance out its relationship with the US in the short term.

But over the long term, I feel that things will go back to where they were because that is founded really on economic and strategic considerations, which for India at this point are that diversification means looking beyond just China and Russia, not at their expense completely, but looking beyond them as well. So I think this is a short term trend. And we'll be back to the strategic realities sooner rather than later.

Okay, so let's come to the question where we started, which is that what should be the way forward? And let me come to you, Indrani, now. So again, there are two kinds of situations and do walk us through both and then tell us what you feel is more appropriate.

One is, of course, that we should harden our position. And the second is that we should acquiesce. And if so, in what way or put differently, if we should be smoking the peace pipe, then how should we be doing it?

Indrani Bagchi

Well, there is a third way, which is go back to the table. And, you know, if you just don't agree, I mean, there are things that we cannot do, and we shouldn't either. There are things which like GM crops, which we cannot have because it's illegal in this country.

On the dairy front, yes. I mean, I'd like to see all the vegetarians in this country drinking non-vegetarian milk or, you know, that campaign playing out. So let's, I think we can safely put that aside.

But there will be areas, there will be areas where we can work on, which is energy imports, energy investments, defence investments, defence buys. Basically, energy and defence are your big sort of areas where you can invest.

Indrani, so you're making it a specific thrust rather than broad, you know. So when I say smoking the peace pipe, what I'm referring to is...

Indrani Bagchi

So between, no, no, that's just one, this is just one part. The other part is the political relationship. Now, in my sense, my sense is the political relationship has taken a bigger hit than the trade relationship.

Because the political relationship, it's a personal problem between the prime minister and President Trump. I don't see that actually correcting itself. So my sense is everybody will sulk for a while.

There will be a sulk period and we should allow everybody to sulk and not pick up the phone and talk to each other. And that's fine. If we can fix the trade negotiations, I think we will be in a good place.

Otherwise, you know, this political issue will remain a problem. It will take the Americans a long, long time to get back to being a trusted partner again. There will be other strains in the relationship.

You will see H1B visas going or at least being severely depleted. Your student population, as any case, come down drastically, will come down even further. One of the things that I think we should do is to make it easier for American investments to be in India.

Who is speaking for India today? Not the diaspora. And I'm sorry, Gaurav, you are a part of the diaspora.

But honestly, the diaspora isn't worth the dying. But there is one man who is batting for India today in the White House. That man is called Tim Cook.

And we should have a reason to create more Tim Cooks. There is a reason to create more Tim Cooks. And it's fertile ground to create more Tim Cooks.

So that's where we should go.

But that's an interesting, yeah, no, I get that. But, you know, it seems that's an interesting, I don't know, challenge. Because, you know, even I remember around April and May when, let's say, the first announcements were being made of tariffs.

April, of course, was the first announcement, the Rose Garden announcement. Around that time, McDonald's, a brand that the president likes to be seen alongside as a symbol of, you know, American, I mean, as an American symbol, was setting up a 2,000 seat global capability centre between Hyderabad and Bangalore, or mostly Hyderabad, I think. And, or announced it, and then they were setting up and they've obviously been visiting for some time.

So McDonald's is already in India. But this was a different kind of investment, which is a newer investment, which is to say that, okay, we're also not just selling you burgers, but we're also setting up a big shop and leaning into your talent and so on. And there are so many other American companies.

My point is, none of them are really going to speak up, except for maybe Tim Cook, as you said.

Indrani Bagchi

Because there is a fundamental difference between Apple and McDonald's. And in fact, many of the American companies are now keeping quiet about the GCCs, because they see Trump reeling them back in and saying, hold your GCCs here, and not in India. So there is that.

A GCC is not an investment. A GCC is literally value-added outsourcing. So we haven't been able to monetise our capabilities in terms of design, in terms of innovation, in terms of R&D.

Why has Tim Cook taken the bet on India that he has? Because there are very, very good reasons to do so. And I mean, that's a different story.

We have to make it easier for others to do the same. Do you see Micron lobbying on India's behalf? Do you see Lam lobbying on India's behalf?

Do you see Palantir lobbying on India's behalf? That's because they need to build stakes in this country. And we need to be able to allow.

So I look at, frankly, I look at this moment as a 1991 moment, that this is a time for us to rewire ourselves. So Indians are not going to speak for India in the White House. It will still be the Americans speaking for India in the White House.

And that is something we need to encourage.

Gaurav?

Gaurav Sansanwal

No, Govinda. I think I agree with Indrani that this can be a great crisis. It's always an opportunity when it comes to economic reforms.

And from that perspective, this is a great opportunity for India. But I think a couple of other points are also relevant to note here. We've spoken a bit about pressures and red lines on the Indian side.

But going back to just basic economics, these tariffs are going to hurt US consumers because that's where these costs are going to get passed on to. I was just looking at State Bank of India, which has just done some economic research. And what they are pointing out is possibly a 2% plus hike in US inflation from where it is today, which is a high in itself.

And leading to more than $2,400 per household being spent in battling this out. So I think that is going to be something that India would be watching out for as well, that the longer this goes on, there will be domestic economic pressures as well, leading up to, obviously, the midterms, which are important. So I think two things for India.

One is going to be, as Indrani said, on the defence and energy side, there is room for India to buy more. There is a ceiling to that, no doubt. If we talk about energy, Middle East is a more price competitive buyer for India than the US.

But it can obviously rise, because we saw earlier in the Trump first presidency as well, 2016, India wasn't really buying much energy, but it went up to about 6% right before COVID. And it's continued to grow on this year as well. So I think India will try and offer a deal where it can buy a little bit more.

Maybe we may even see, to your point of investment into India, we may even see some amount of commitment on investment into the US from India, because that's something that some other countries have done. And obviously, there are some businesses in India who would look to invest a little bit more in the US maybe. I think a combination of some amount of two-way investment between the two countries and a little bit of more openness in certain sectors like defence and energy, and then at the same point of time, a hope that these inflationary trade and tariff moves would have a timeline to them and would help in closing this out in the next few weeks.

I think that's how I'm looking at it broadly.

Ambassador, I'm coming to you. You're saying, therefore, that, you know, I mean, of course, there's this Russian oil import issue hanging over all of this. So I guess our presumption appears to be that if you take that away from the equation, most of this can be renegotiated or negotiated back to something that's acceptable to both sides.

Sanjay Bhattacharyya

Partly that. Let me say that, you know, the two have got interlinked, because in some way, President Trump does see them as being interlinked. I believe that on the economic side, we can always have a deal, because and let us not forget, I don't think either side really wants to have the pain, because there is pain on both sides.

If we were to continue with this 25 percent extending to 50 percent, there is going to be pain on both sides. And I don't think either side wishes to have that. And many of those things will require a certain degree of adjustments.

Maybe you go back to where we were in terms of the agreements that we had reached during the negotiations. And there's another round that's coming up at the end of the month where we would be able to kind of reach some sort of understanding on where we are on that economic side. Investments will be a big bit.

Defence will be a big bit. To get more energy in will be a big bit. You know, we have to improve the ease of business, ease of doing business in the country.

And we can provide some of those instances to the Americans. And I think those will be good examples. But I do think that all this will also be important, but not as important as trying to work with Trump on the geopolitical, geostrategic issue.

And for that, I think a lot more heavy lifting will have to be done. The officials will need to get onto the same page. They are actually on the same page, but I think a lot of that is not filtering up to the ministers and their principles.

So I think the officials will need to do that ironing out of the differences in perceptions. There is commonality on our strategic partnership, but why have these emerged? And then I think Jaishankar and Rubio will have to have their conversations.

And I am convinced that it will require a conversation between the prime minister and president at the end of the day to get back on an even keel because this relationship is way too important. And both of them realise that. And I think they're both equally committed to a very wonderful relationship as President Trump might have put it, or an amazing relationship.

But I think we can get there. And it'll require some heavy lifting on both the economic side, as well as ironing out the differences in perceptions. I don't think they're differences.

They're just differences in perception on the geopolitics of it.

And I'm going to come to a quick sum up. And let me start with you, Gaurav.

So there's a deadline to all of this. August 27th is when the next 25% kicks in. We are already at 25%, which is also high.

I've been talking to exporters, and I know that even 25% for them is too high because not very long ago it was zero. And you've gone from zero to 10, and then 10 to 25, and then it might go from 25 to 50. The weighted average, as I understand, is about 33%, because there are areas like pharmaceuticals and, of course, iPhones, which are right now close to zero.

But if I were to ask you, and then all of you, the one or two things that you think which is maybe out of the box that could maybe bring things back to even keel, and maybe it's more interpersonal, more political rather than trade, what could that be? Gaurav, let me begin with you.

Gaurav Sansanwal

No, I think I agree with the ambassador that we've seen that there has been willingness on the side of President Trump to negotiate these kind of tariffs, and we've seen that happen with other countries. But the trigger for that is usually a phone call or a visit by the head of the state, which can sometimes be risky, especially given domestic issues in India and the plethora of different issues on the table. But I think that is the best way out of this.

So I think in terms of out-of-box thinking and looking at what can be done, I think one would be a high-level conversation which can look at the broader picture. I think second would be, I think just getting a foot in the door, I think going back to ambassador's point that another trade delegation is coming out to India, maybe just getting an extension of a few more weeks as they talk, or maybe agreeing to, even if it's 50% of the framework, but if whatever work has been done, announcing that, announcing a phase one framework or agreement, just something that buys time. Because this is not going to disappear completely in the coming months, but the best way to handle it perhaps is to create that good news story which keeps us going in a way that it's a win-win. So I think a conversation, maybe a framework document of some kind, or something that just gives this relationship some good news right now, I think would really help.

Or a headline as Trump would say. Indrani? One of those things including out of the box.

Indrani Bagchi

I would not put Trump and Modi together at this point at the two ends of a telephone line right now. I think that has to be literally the last thing on the menu. Right now, my view would be to use, to actually fix the Russia relationship.

In fact, India can make itself useful behind the scenes by actually getting the Russians to do something. The war needs to end and India needs to be, since Trump has put India on the spot where Russia is concerned, let us embrace this thing. Let us do the job.

Let us be that mediator. Let us do something with Russia. We have to, because basically, Trump needs to step off the bench on Russia.

The trade negotiations will happen. And a little bit of giving here and there is probably called for. I'm not competent to say what it is.

We don't need to announce investments right now. They will come. Once, if you have five defence deals, or if you have, we are not going, nobody's going to look at the 10-year framework agreement for defence right now.

So I think that is off the table at the moment. I'm not even sure whether the Quad Summit will happen in the way that we think it will happen, at least whether Trump will come or whether he will send vans, in which case it downgrades the Quad. And I don't think the Americans want to do that.

But at this moment, I would say, let India work internally, let India work with the trade negotiators and let India work with Russia, but leave Trump alone and leave Trump and Modi alone for a while.

And on Russian oil, I mean, should we be decisively?

Indrani Bagchi

We should continue to buy, it doesn't matter. Russian oil apparently has come, the prices have come down. We should continue.

See, if the price is right, you buy. If the price is not, if the executive order on the Russian oil, and only Bloomberg has read the executive order, which said that if you buy the Russian oil and sell gasoline and petroleum products, America takes it without the tariffs. Reliance will be happy. That's all that matters.

Except that I don't know how much refined product goes to the U.S. I think most of the exports are mostly in Europe.

Indrani Bagchi

Even if it goes to the U.S., even whatever goes to the U.S., you can, if it is without tariffs, that's fine.

Ambassador, last word. So what could save this, if so? And what could be an out of the box approach at this point?

Sanjay Bhattacharyya

I think our engagement with Russia would not be diluted. And rather, I would say should not be diluted. And I think today, there is really no sanction on Russian oil.

There's a price gap and we can go by that. I also feel that, you know, pointing out that there are others who are in the same league, particularly the Europeans, is a useful thing to bring out. Jayashankar has been doing this for some time in telling the world, particularly from European capitals, that you are dealing with the Russians.

So don't make us, you know, the scapegoat all the time. The intent to continue with the war, a war of attrition, has largely been also Europe's priority. And I'm using that word very deliberately.

And I think that needs to be brought into focus. And as I was saying earlier, we did see a sudden change of mind after the NATO summit in Trump's mind. So we do think that the Russia factor needs to be kept on an even keel.

We need to continue our relations with Russia. We need to bring out to Trump that it's not us. There are many others who are involved.

And at the same time, I think on what Trump really wants, which is to have a good relation and economic relation partnership with India, we need to do that. I personally think it is time to have a look at our agricultural sector, not in our discussions with the Americans, but internally. Is this time for another agricultural revolution?

And what will be the contours of that? I will go with Indrani and say, I do not support GMOs, but there are various other aspects of our agricultural sector, which need to be looked at. Of course, we need to do that internally.

But the very fact that we start doing that will be a very strong signal, I think.

And that's been a view across other quarters as well, we should use this as an opportunity to open up. Remember, we have been raising tariffs since 2014.

And in the previous years, it had actually come down. I'm talking about the median tariff level. But the last point, Ambassador, which Indrani also referred to, should President Trump and Prime Minister Modi be talking to each other at this point?

Sanjay Bhattacharyya

I am convinced there is no option, but for them to do so. But as I have said earlier, this needs preparation. Modi and Trump should not be speaking tomorrow.

There needs to be a lot of preparation at the official and the ministerial levels before Modi and Trump can speak. But I think without that conversation, we will not see the kind of solutions that we wish to have.

That's a useful note to end on. Thank you all for your practical and out-of-the-box solutions.

And of course, being candid on where we need to go and how we need to go about it as well. Ambassador Indrani and Gaurav, thank you so much for joining me.