India watches as US President Donald Trump engages with East Asian leaders

Last week, our government took some measures to facilitate trade for importers and exporters. Their attention, however, was more on the outcome of US President Donald Trump’s visit to Malaysia, Japan, and South Korea. 

The Directorate General of Foreign Trade (DGFT) announced the launch of Bharat Aayat Niryat Lab Setu, an initiative that seeks to streamline testing and certification by digitally connecting importers, exporters and accredited testing and inspection agencies through a unified online interface.   

The DGFT revised the eligibility criteria for registration of exporters on the ‘source from India’ service of the ‘trade connect e-platform’. The finance ministry merged 31 Customs exemption notifications into a single notification no.45/2025-Cus dated October 24, 2025. These and some other small measures conveyed the government's intent to be helpful but got very little notice because, through last week, the outcomes of President Trump’s talks with leaders of many Asian countries were of greater interest. 

In Kuala Lumpur, Trump officiated the signing of a ceasefire deal between Thailand and Cambodia, secured new trade agreements and frameworks with Malaysia, including arrangements on critical minerals, tariff access and trade-policy cooperation. He also met with other leaders of the member countries of the Association of South East Asian Nations (Asean). 

In Tokyo, he met with Japan’s newly-appointed Prime Minister Sanae Takaichi and reaffirmed the US-Japan security alliance with the Japanese side pledging to boost defence spending to 2 per cent of GDP. He signed a pact to get supplies of rare-earth and critical minerals aimed at reducing reliance on China and got Japan to commit large investments ($550 billion) in the US in sectors like energy, artificial intelligence and critical minerals. 

In Gyeongju, he met with Lee Jae-Myung, the President of South Korea and obtained commitments to buy aircraft and fuel from the US and make investments of $350 billion in return for tariff cuts on South Korean goods entering the US to 15 per cent and nuclear-powered submarine technology know-how. 

The biggest achievement of Trump was the meeting with President Xi Jinping of China at Busan, South Korea, where China promised to resume purchases of US agricultural products, notably soybeans and to ease or delay export restrictions on rare-earth minerals that are critical for consumer electronics and defence applications.  The two leaders agreed to cooperate on curbing the illicit trade of fentanyl precursors. Trump agreed to reduce the ‘fentanyl-related tariffs’ from 20 per cent to 10 per cent. He also talked of a formal trade agreement with China soon and reciprocal state visits early next year. 

For many observers in India, Trump’s bonhomie with the leaders of various countries in Asia and willingness to cooperate on trade, defence and economic issues raised hopes of positive overtures towards India. Trump did make some positive remarks about our prime minister and talked of a possible trade deal with India. Our commerce minister, who has been working tirelessly for trade deals with the US and the European Union, also made encouraging remarks about the progress in the trade negotiations. However, a feeling of being isolated and sidelined did not escape many Indian businessmen. 

In the meantime, China has allowed export of some rare-earth minerals to select Indian firms. That has raised hopes of improvement in India-China relations. Quite a lot now depends on how our government reaches out to the leadership in China and the US.

 

Email: tncrajagopalan@gmail.com