Mark Linscott
Interview/ Mark Linscott, senior adviser, US-India Strategic Partnership Forum, and former trade negotiator with Trump administration
Q/ Many experts are of the opinion that this could actually be a blessing in disguise that will help the Indian economy reform faster.
A/ That, in fact, would be the best case scenario, that there is impetus to advance the negotiations, to make progress and even conclude an agreement as a vehicle for reforms that might make a lot of sense for India’s development and the growth of its economy.
For example, there have been a lot of issues on the trade front related to India’s alignment with best global practices and using international standards for certain goods. Reform in this area would be very helpful and make India much more competitive globally.
As are copyright, which is definitely going to be part of the negotiation for a bilateral trade agreement. India has made some significant steps in recent years to reform. For example, patent laws to move further along with the impetus being negotiations on a bilateral trade agreement that could be quite significant, particularly on the research and development side.
And, most important, tariffs. India has high tariffs. That’s well known globally. Lowering tariffs, while difficult politically, can can help certain industries by having more opportunities, more choices for inputs, for machinery to manufacture. That could be beneficial to the Indian economy.
Q/ Can we expect major chaos if the government goes in for that kind of a drastic reform? Or will the ecosystem adapt smoothly?
A/ It depends on what is on the table, what can be negotiated, what degree of tariff cuts, tariff liberalisation might be possible. Certainly looking at a scenario at the potential for US reciprocal tariffs that could be applied to Indian exports, perhaps even an Indian response; that is not good for anybody.
Cutting tariffs in any country comes at a political cost and it can be quite sensitive for certain sectors. We experienced that in the US where the steel industry has been benefitting from protection for some years, certainly since the first Trump administration, and it continues to advocate for more tariffs. So it is difficult. But the ideal scenario is that they can reach a tariff deal.
Ultimately, I think it could benefit India just in terms of its overall growth. But, the steps potentially taken to reduce tariffs can lead to political churn. Prime Minister Modi has shown himself to be remarkably savvy with political constituencies. And if any leader can do it, I expect he is one who could!
Q/ Could it also benefit the Indian consumer?
A/ It depends on the sector. Negotiations should be a two-way street. An example I know fairly well is in the medical devices sector where there are significant tariffs. Regulatory measures do restrict the access for high-end, high-tech innovative medical devices, making it difficult to trade in the Indian market. Lifting of those barriers could have real impacts for Indian consumers in terms of access to the best products out there.
Q/ India is just one piece in a chessboard full of moves that the US has initiated. There are tariffs and other measures aimed at a lot of other major economies. Are we looking at a rewiring of the way things are done globally?
A/ I do think it is far reaching. There’s no doubt about that. It’s been building up. This trend has been playing out for some years now, even before the first Trump administration. The WTO essentially proved itself not up to the task in being able to continue negotiation of progressive liberalisation and creating new rules.
In some respects, I think we have a scenario that has parallels with the period between the World Wars in the 1930s. Globalisation broke down, high tariffs were applied by the US and others and there was retaliation. A lot of bilateral trade agreements were done during that time. It was pretty chaotic. Some analysts say that was a contributing factor to the start of World War II.
There are parallels and that is highly disturbing. That said, though, and I’m going to be an optimist here, certainly between the US and India, I think this is a tremendous opportunity. I have been advocating for this for some time. If the US and India were to be able to negotiate a far reaching, comprehensive bilateral trade agreement, that would be a game-changer.
Q/ What do you think would be the best possible outcome that India can hope out of this?
A/ Immediately, a tariff deal could delay imposition of reciprocal tariffs against India. Short of that, a deal that at least would mitigate the magnitude of reciprocal tariffs that could be applied.
This is not just US-India. This is US and Vietnam, US and the European Union, US and many other countries. So to be able to strike a deal that might at least lower the impact of tariffs for India, while perhaps higher tariffs are being applied to other countries, could be a benefit.
And the most important thing is that they reach an understanding on tariffs and negotiations continue. It shouldn’t get so bad with US reciprocal tariffs and retaliation by India that the broader negotiations do not move forward.
Q/ What are the other things India could do to leverage itself? Not just India, even any other country, because the whole world is looking at this as a dramatic shift.
A/ Many countries are working very hard, hustling a lot in coming to Washington and trying to have discussions that can lead to individual trade deals with the US.
India has an advantage over some of those other countries because, in some respects, it is first in line. Prime Minister Modi’s visit within weeks of the inauguration was huge. And their specific agreement to launch a bilateral trade agreement negotiation was huge. The resources now, certainly on the US side, are being directed towards India and perhaps less so to some of these other countries.
To keep the US and India from moving into a trade war is critical. I am optimistic that they can do that, that they both understand the stakes. It’s a win-win scenario. So much of the analysis of the Trump administration and the president himself is that he’s transactional and he sees things in zero-sum terms, that there is a winner and a loser. I don’t think that that applies so much with India.
I think that there’s an understanding in the administration that both sides have to win, that India has to gain from this negotiation as well.
During the first part of the first Trump administration, I was the lead US negotiator. It was understood on the US side that India (also) has to get something out of this deal for there to be success. Even though those negotiations eventually broke down, it got very far along. They can benefit from the experience of that first effort to negotiate on trade.