US Fresh Tarrifs on India : Carrot and stick game ?

Описание: Carrot-and-stick game: What fresh US tariffs mean for India in trade deal talks
The US has launched two Section 301 investigations against India: one for not restricting imports of products produced through forced labour, and the second on excess capacity.
Excess capacity refers to a situation when a business produces less than its maximum possible output, that is, the gap between a company’s total supply (at peak efficiency) and the actual amount it currently produces and sells.
The announcement of Section 301 tariffs on India and 59 other countries has yet again turned the India-US trade deal negotiations into a familiar carrot-and-stick game for the Indian trade negotiators, as concessions offered by the Indian side would now determine the level of tariffs that the US would impose next month.
The pressure of upcoming steep tariffs resembles past negotiation tactics that aimed at extracting market access commitments across sectors — including agriculture — right before negotiations were set to take place.
Negotiations had broken down over access to agricultural products, where India offers support to its farmers.
While signing a deal could mean giving up more control of its sovereign trade policies to the US, an absence of the deal could accelerate the weakening of the domestic currency and flight of foreign capital that had begun since late last year.
The war in the Gulf region and higher oil prices have further weakened India’s macroeconomic conditions. More tariffs could add to India’s fiscal worries.
Senior government officials have said that an agreement with the US might leave India in a difficult position, particularly in its relationship, as the US has been nudging countries to wean away from their dependence on China. Indian imports across sectors have crossed $112 billion. Restrictive measures on China at the US’s behest could also create security-related challenges for India.