In an exclusive conversation with ET Now, Sudip Bandyopadhyay shared his perspective on the dynamics shaping this rally and its broader implications.
“You are absolutely right. The rally we are seeing today in the US markets is essentially sentiment driven and the sentiment is led by Scott Bessent’s statement. The US needs a deal with China. The US cannot afford it, the US political establishment, especially the Republicans, cannot afford to have soybean purchases halted by China. It will be a disaster in the heart of the US,” said Bandyopadhyay.
He emphasized that the United States’ dependence on Chinese supplies — especially rare earths essential for advanced manufacturing — makes a trade deal indispensable.
“They also need the rare earth from China, otherwise their production engine, especially the top end of production, the high-end production, whether it’s the EV, whether it’s the chips, whether it’s the high-end gadgets, will stop. So they need a deal. On the other hand, China also needs a deal. They can’t afford to stop exporting to the US, nor can they afford to not to source the high-end chips from the US. So it is a necessity for both parties to get it.” a deal,” he added.
However, Bandyopadhyay urged caution, pointing out that so far only the US side has spoken out. “We haven’t heard a single word from the Chinese side. The statements are all coming from the US. So I’ll wait and see. I don’t think I’ll get carried away by what the US government says because we’re used to hearing all kinds of statements from the US government now. Let’s wait and see. So I’ll be very careful.” Tensions could reduce the urgency for Washington to diversify away from China, potentially affecting India’s position as a ‘China-plus-one’ partner, Bandyopadhyay agreed, but said India needs to rethink its competitive strategy.
“I agree with you. The fact is that if the US and China agree to a trade deal… let’s focus on the tariffs. India is now concerned about the 50% tariff. 50% of our exports become unviable for us and we need to do something about the tariff if we are to get back to our GDP growth that was originally projected before the 50% tariff was levied on us.”
He warned that if the US and China reach a favorable deal, India’s export competitiveness could be further tested.
“If the US and China have a lot and the tariffs on the US and China also come down significantly, then now all of Southeast Asia, all the competing countries, whether it’s Bangladesh, Vietnam, Malaysia, Indonesia, South Korea, everyone has a tariff on exports to the US that is significantly lower than where India is now. If China now goes there too, we have a huge challenge in terms of our exports to the US.”
Bandyopadhyay further noted that a “sweetheart deal” between the US and China could dilute India’s strategic importance, underscoring the need for a sharper, differentiated approach.
“As far as a deal with the US is concerned, I am sure that a sweetheart deal between the US and China will weaken our hand. Whether we admit it or not, the fact remains that the US needs India and the US’s need for India will diminish to some extent in such a scenario. So, we need to sharpen our value proposition and position ourselves differently.”
He also highlighted India’s limitations in opening up sensitive sectors and the need to identify alternative strengths.
“There are certain red lines as far as India is concerned. We probably can’t open up the agricultural sector the way Thailand has or some other Asian countries have opened up to American agricultural products. We just can’t do that. It’s not politically and economically acceptable. So we have to think of alternatives… We don’t have something like a rare earth that China has used very effectively to arm the US. So we really have to work hard.”
Bandyopadhyay ended on a pragmatic note, saying India’s huge domestic market can still be used as a strategic bargaining chip.
“Of course, our population of 140 crore – a huge consumer market – is attractive to American companies and we need to capitalize on that sentiment and try to strike a deal.”
As both Washington and Beijing move closer to the negotiating table, market participants remain vigilant. While optimism is fueling the rally for now, the real test lies in the fine print of any potential deal – and in how countries like India position themselves in the evolving trade order.
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