WEF President Borge Brende optimistic about US-India trade relations despite recent tensions

In an exclusive interview with India Today, Borge Brende, President of the World Economic Forum (WEF), shared his perspective on the diplomatic tensions between India and the United States, which have flared up over reciprocal tariffs imposed by former U.S. President Donald Trump. Despite the recent challenges, Brende expressed optimism that the tensions would be short-lived and that the relationship between the two nations would soon return to normal.

“There have been decades now of closer cooperation between the US and India. So, there have been a few weeks now where there have been some hiccups, or maybe more than hiccups, but I think this will pass,” Brende remarked, signaling that the current trade friction is only a temporary phase.

Brende’s comments come in the wake of Trump’s imposition of a 50% tariff on Indian goods, including a punitive 25% duty related to India’s oil trade with Russia. These tariffs, alongside sharp remarks aimed at India, had strained the bilateral relationship. However, the swift response from India, including reciprocal tariffs, helped ease tensions and set the stage for renewed trade discussions.

Brende expressed confidence that both the U.S. and India understand their mutual interests and are dedicated to resolving trade disputes. He emphasized that while tensions may arise, especially in trade negotiations, both nations recognize the importance of collaboration, especially with India’s burgeoning services and manufacturing sectors.

Looking ahead, Brende acknowledged the possibility of increased trade tensions with the return of Trump to the presidency. However, he noted that Trump's approach to trade often involves using tariffs as a tool to negotiate better deals, and these tariffs could ultimately serve as a starting point for more comprehensive negotiations between the two countries.

In terms of strategic alignment, Brende also highlighted the US’s focus on diversifying its trade relationships, with India positioned as a key partner in this regard. India’s growing manufacturing capacity and robust services industry are crucial to the US as it seeks to strengthen its presence in Asia.

While the US-India trade relationship faced a significant test recently, Brende reassured that the spat is already in the past, referring to the events of the last two months as "water under the bridge." He noted that the US sees India as an important player in the region due to its economic potential.

Brende commented that the direct impact of the US tariffs on India’s GDP is relatively minimal, at around 2%. He stressed that India’s larger market and growing economy provide a buffer against such trade obstacles.

Regarding India’s continued import of Russian oil, which had been a point of contention with Washington, Brende indicated that this is still an ongoing discussion. However, he suggested that the geopolitical situation could change soon, potentially bringing the Russia-Ukraine conflict to an end in the next six months, which may alter the dynamics of the conversation.

The issue of India importing Russian oil was also discussed. Brende downplayed its significance, stating there is no global consensus against Russia’s oil imports, and that this issue is manageable for both the US and India.