Wednesday, October 14, 2026

We should offer the fig leaf.

"The International Monetary Fund (IMF) has raised India's gross domestic product (GDP) growth forecast for 2026-27 by 60 basis points (bps) to 7%, citing resilient domestic demand and robust services activity." "In its latest World Economic Outlook, the IMF also raised its growth projection for FY28 by 30 bps to 7%." BS. India has signed trade agreements with at least 14 countries, known as PTA, CECA, CEPA and CECPA, which are probably not fully free, and Free Trade Agreement (FTA) with New Zealand, Sri Lanka and Thailand. wikipedia. A BTA, or Bilateral Trade Agreement, with the US is frozen. "US Trade Representative Jamieson Greer said he did not think there was 'something imminent' on the trade deal with India and the two sides have identified 'the universe of items' that are sticking points." ET. Agreeing with Green, "Finance Minister Nirmala Sitharaman said that the India-US trade deal talks have hit a plateau, beyond which giving or taking might be 'very,very' difficult." TIE. Trade talks "in the past months have met with complications, most recently a new US law that paves the way for up to 100% tariffs on Indian goods because of New Delhi's purchase of Russia oil." "A deal has also been held back because Washington is yet to complete a Section 301 trade investigation on several nations over alleged excess industrial capacity." Reuters. However, the picture changes fast where US President Donald Trump is involved. "Trump is facing a growing backlash over plans to import diesel from Russia as the Iran war continues to impact global energy prices." "As well as the initial release of 300,000 tonnes of diesel, Trump said Russia would then supply 500,000 tonnes in November and one million more after that." BBC. In an effort to surpass the US economy, "Beijing has been over investing for years, but lately, it has been dumping the excess output it can't sell at home. In the past, export volumes rose with prices; this decade, Beijing has dropped export prices nearly 20%, producing a 40% surge in volume." Combined with weaker imports, China's trade surplus jumped 20% last year to a record $1.2 trillion, wrote Ruchir Sharma. Unfortunately, "The US will remain reliant on China for its rare earths well into the 2030s even as it builds its own mining and processing facilities." "While US output of the two most-commonly used rare earths has more than tripled since Trump returned to office last year, the country can meet only 42% of its demand and within five years will still rely on imports for nearly a quarter of its demand." Reuters. India does not have a rare earth industry nor the efficient productivity to triple production within one year to entice the US. Also, "Events including a US military attack on a ship off Oman that killed three Indian seafarers and India rejecting Trump's repeated claim of brokering a ceasefire with Pakistan have hurt relations." Trump is referring to Operation Sindoor on 7 May 2025, in which India attacked Pakistan  (wikipedia) in retaliation for the terrorist attack at Pahalgam in Kahsmir on 22 April 2025 in which 26 unarmed civilians were gunned down (wikipedia). In August, Air Chief Marshall AP Singh said "India downed five fighter aircraft of Pakistan during Operation Sindoor." newsonair.gov.in. No mention of India's losses. This lack of honesty allows Trump to fill the void with his claims. The trouble is that India does not obey rules. "Licensed categories like aviation are rife with policy puzzles. Asset shifts have been wrapped in riddles in fields like e-commerce and infrastructure." "In recent years, though, India has had a boom in outgoing investments, with both foreign and domestic industrial houses investing abroad." Mint. It will be suicide for Republicans if Trump buys diesel from Russia. India should offer to buy crude from Russia, refine it to diesel and supply the US. We get the crude, Putin gets his cash, Trump gets his diesel and the fig leaf stays in position. Comparing sizes of the leaves will not be allowed. We don't take questions.  

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