CGTN Europe spoke to Santosh Rao, Head of Research and Partner at Manhattan Venture Partners.
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00:00Well, let's talk now to Santosh Rao, who's head of research and a partner at Manhattan Venture Partners.
00:04Good to see you, Santosh. Welcome back to the program.
00:07How do you assess, then, the state of U.S.-India relations in the run-up to this meeting?
00:14Yeah, well, this is definitely a soft touch against the backdrop of harsh tariff rhetoric.
00:21So I think this is welcome in that sense, good photo opportunity, good soft touch, to what's something harsh behind it.
00:27Well, overall, I think India is in a good bargaining position in terms of, on a relative basis, in terms of tariffs.
00:36Of course, 10% is better than 26%.
00:38I think, but India can handle it.
00:41At this point, they have, things are going their way.
00:44The dollar coming down, energy prices coming down, energy, India imports 85% of its energy.
00:51So that's coming down.
00:53So that's good for them.
00:54And then, overall, goods exports from India is just 1% of the overall GDP of India.
01:03So it doesn't affect them that much.
01:05I think it's really on the other side, like your commentator said, gems and all the other ones, the IT part, that's going to get hit.
01:12So there are some other second-order effects of the exports that need to be adjusted.
01:18So I think, overall, it will be a very, very constructive engagement.
01:23And I think India is looking forward to talking to the U.S. and getting this behind them so they can move on.
01:28So what might the implications be, both regionally and globally, of a potentially closer U.S.-India relationship?
01:36So, I'm sorry, I did not understand the question, but what are the indications that India is close to U.S.?
01:45I think, overall, it's just the size of the Indian market.
01:49I think U.S. needs India more than India needs U.S. at this point, because the size of the budget, the trade surplus is very small on a relative basis.
01:58It's 40 billion exports, 20 billion imports, so it's really small.
02:03I may be off a new bet, a few dollars here and there, but net-net, we have an export, India does, an export surplus.
02:10Trade balance is in India's favor, so they can adjust that.
02:13They can, and they have promised to do more.
02:16They want to do 500 billion in a couple of years in overall trade between the two countries.
02:21So they want to do more defense equipment that U.S. would love to sell India, buy more energy from U.S.
02:28So there are things that can be done, can be adjusted.
02:31India needs them badly.
02:32U.S. wants the huge Indian market.
02:36So you can tell on just the size of the market, the way it's growing, the population, and the internal power of the labor market and all that, infrastructure growing.
02:46So there's tremendous opportunity in India.
02:48So I think there is a mutual interest for both countries to work together and get it together.
02:52Obviously, the threat of U.S. tariffs are doing everything, really.
02:56How important is it for India that some arrangement could be made over this?
03:01I think it's important.
03:03They need to get this out of the way.
03:05Things need to be – if you look at the Indian market, it's not that effective as other countries
03:10because overall the trade, the net exports or the import-export balance has a very minute influence on the GDP.
03:21It's a very small part of the overall GDP, but it's big.
03:24So, you know, don't get me wrong.
03:25So India needs to get it together.
03:27It needs to have a good constructive relation, and it's growing.
03:30It's growing, and it's a counterbalance to China.
03:33They want to take full advantage of it.
03:34So they need to be constructive with the U.S. to take advantage of India's – U.S.'s hostility towards China.
03:41So I think that's playing into their hand, too.
03:44So that's – they need to work together.
03:46So I think it's net-net.
03:48I would say India – it works in India's favor to be constructive and give U.S. what it wants to some extent
03:54because they have some internal pressures as well from the farmers and other local markets.
03:59So they need to find a balance, a very delicate balance, I would say, but they can do it.
04:04India has tough negotiators.
04:07Trump likes Narendra Modi.
04:09So I think in that sense, a few things working in their favor.
04:12So I think the engagement will be constructive and the outcome will be beneficial to both of them.
04:17Santosh, great to talk to you as always.
04:19Thank you for coming on the program.
04:20That's Santosh Rao from Manhattan Venture Partners.