Readying to hit Iran hard, US President Donald Trump, who is seen as a reincarnation of famous or infamous Russian Tsar Ivan the Terrible, has pressured India's pain points. The withdrawal of preferential duty on some Indian goods may hit New Delhi's exports worth $6.5 billion on top of severely damaging its Exim business with Iran following the US move that has already brought India under the Iran sanction regime - from which there was a waiver for some time. Add $2.5 billion of India's exports to Iran, and the total damage to Indian exports works out to $9billion in one single Trump stroke. This is not a small amount for a country like India that has been for years running huge trade deficits reaching a record $176 billion in FY19.

Like all relationships, Indo-US relations have not been without pain points. Without going far deep into the past particularly the Indira-Nixon years, one could see those pain points emerging and hurting the overall ties between the two great democracies. And creating avoidable uncertainties in the minds of the leaders of both countries. Take, for instance, the relationship between the two countries following the signing of Indo-US, or US-India, civil nuclear deal. While the deal helped India engage in legitimate nuclear commerce, it didn't help the US very much till recently when its nuclear power building company Westinghouse got out of insolvency problem.

Even though the blame for the failure to avail of the benefits of the nuclear deal lay squarely on US businesses, bitter sentiments marked Washington grievances on the issue. True, everyone has a tell-tale tendency to eat the cake and have it too. But nations, like individuals, resolve this problem through dialogue and negotiations. Of course, the bitter US feelings for not getting immediately the benefits of the nuke deal was mitigated and assuaged to a large extent by a series of defense deals.

And defense and related technology deals are possibly the best means to carry forward and smoothe the relationship between the two countries straining under huge trade deficit of over US$20 billion in India's favor and apparently unequal playing field between Indian and American businesses, made worse, for instance, by one tax rules for Indian e-commerce companies and another for US and other companies. It seems the tax rules changed in the last months of 2018 might have been born out of a miscalculation on the part of the government which read too much in the personal conflict and disliking between Amazon boss Jeff Bezos and President Trump who often exchange not too pleasant greetings on the Twitter. Prone and extremely vulnerable to malicious gossip, we Indians have a self-destructive pathological tendency to mix gossip with state policy.

The trade deficit of US$176 billion in FY19 tells us a disturbing story - that we don't have money in our ATM and that we are living off on borrowed money. It also tells us that there are serious structural problems with our economy and political governance. Clearly, the US is in a position to help us improve our economy. But they want something in return - fair treatment for their businesses vs spent forces of Indian businesses. They are ready with their proposals for massive investment in defense industries, stressed assets reconstruction, manufacturing, and marketing and so on.

The question is are we ready?

(By M K Shukla & Rakesh Ranjan)