US suspends tariffs on India, Iran nuclear talks restart, India-Bangladesh ties in flux: The world this week

US President Donald Trump continued to flip-flop on his reciprocal tariff plans but suspended the additional 26 per cent tariff on India for 90 days until July 9 this year. However, the global trade war became bloodier this week with the US and China slapping each other with retaliatory tariffs, exacerbating fears of a global recession.

After the US raised tariffs on Chinese goods by a total of 145 per cent – the previously announced 125 per cent plus a 20 per cent import tax levied for fentanyl smuggling – China increased its tariffs on US imports to 125 per cent.

The trade war, sparked by the announcement of “reciprocal tariffs” by the US against all major trading partners on April 2, has seemingly turned into a direct economic showdown between the world’s two biggest economies, the US and China.

Stock markets continued to fluctuate amid reports of the US dollar crumbling since Trump’s higher import tax rates on dozens of countries and territories, including a massive 104 per cent levy on Chinese imports, came into effect on Wednesday midnight.

Different countries diverged in their responses, but the strongest retaliation came from Beijing, which raised tariffs on US goods to 84 per cent. The European Union also approved retaliatory tariffs against the US. India, on the other hand, avoided retaliating and continued to engage with the US to firm up a bilateral trade pact by autumn.

However, the unfolding tariff war took a strange turn when Trump abruptly backed down on his tariffs on most nations for 90 days – except China, for which the tax rate was further raised to 125 per cent. Following the announcement of the pause, the global market surged. The EU also put its counter-tariffs against the US on hold for 90 days. Nonetheless, investors remained wary of the fallout of the escalating trade war.

Although the threat of reciprocal tariffs on India has not been completely ruled out, New Delhi has continued its bilateral trade talks with the US aimed at more than doubling trade between the two countries – from the current $191 billion to $500 billion by 2030.

India has also accelerated trade negotiations with other countries and blocs, including the UK and the European Union. New Delhi is navigating the flaring global economic tensions and rising protectionism by working on bilateral trade agreements. This commitment to advance bilateral ties is also pivotal to India’s deepening regionalism.

Revival of regionalism

However, India-Bangladesh ties apparently took a different turn this week when India withdrew the transshipment facility for Bangladesh’s export cargo, saying it was causing “significant congestion” in Indian airports and ports. The decision was announced late Tuesday through a notification issued by the Central Board of Indirect Taxes and Customs (CBIC).

“Logistical delays and higher costs were hindering our own exports and creating backlogs. The facility, therefore, has been withdrawn w.e.f. April 8, 2025. To clarify, these measures do not impact Bangladesh exports to Nepal or Bhutan transiting through Indian territory,” MEA spokesperson Randhir Jaiswal said.

The move came days after a controversial statement by Bangladesh Chief Adviser Muhammad Yunus, advocating greater Chinese trade ties with “landlocked” northeastern India, using Bangladesh ports and calling the country the “only guardian of the ocean for all this region”.

On the sidelines of the sixth summit of the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) forum held in Bangkok on April 4, Prime Minister Narendra Modi met with Yunus and asked him to “avoid rhetoric that vitiates the atmosphere”.

Nonetheless, the BIMSTEC summit demonstrated the member countries’ commitment to regional integration and cooperation. During the summit, India and Thailand announced the elevation of their ties to the strategic level. The deepening cooperation between India and Thailand also augurs well for revitalising the BIMSTEC forum.

The unanimous adoption of the Bangkok Vision 2030 was another landmark development, which emphasised the need to build regional capacities to address common challenges.

US-Iran nuclear talks

The US and Iran held “positive and constructive” nuclear talks on Saturday (April 12, 2025) in the Omani capital, Muscat and agreed to meet again next week.

The Iranian delegation was led by Foreign Minister Abbas Araghchi, a central figure in the 2015 nuclear deal, while the US delegation was headed by Special Envoy to the Middle East Steve Witkoff. Iran’s foreign ministry said the talks were held “in a constructive and mutually respectful atmosphere”.

The White House also issued a statement saying the talks were “positive and constructive”. “These issues are very complicated, and Special Envoy Witkoff’s direct communication today was a step forward in achieving a mutually beneficial outcome,” it said, adding the sides agreed to “meet again next Saturday.”

Iran’s Foreign Ministry said the negotiators also spoke directly for “a few minutes”. However, Iran maintains that it is against ‘direct’ negotiations with the US, but is open to ‘indirect’ talks and ready to give diplomacy a “genuine chance”.

In 2018, Trump unilaterally withdrew from the Iran nuclear deal signed in 2015 between the P5+1 states (China, France, Russia, United Kingdom, and the US, plus Germany) and Tehran, also known as the Joint Comprehensive Plan of Action (JCPOA).

Ahead of restarting the talks, the Trump administration stepped up pressure on Iran and warned that military action was “absolutely” possible against Tehran if talks end without a deal.

On Wednesday, it announced new sanctions against Iran’s nuclear programme and its oil network. In recent weeks, the US mobilised firepower in and around West Asia, threatening Iran with an attack if talks failed to produce a deal, as it continued its bombing campaign against Iranian-backed Houthis in Yemen.

The US and Iran trade barbs ahead of the nuclear talks slated to restart this weekend. (AP Photo)

The situation prompted Iran to warn that “external threats” may lead to deterrent measures. “The continuation of external threats and Iran being in a state of military attack may lead to deterrent measures, including expulsion of inspectors from the International Atomic Energy Agency and cessation of cooperation,” Rear Admiral Ali Shamkhani, a senior adviser to Khamenei, said on social media on Thursday.

President Trump has also said that Israel would be the “leader” of a potential military strike against Iran if Tehran does not give up its nuclear weapons programme. This week, Israel’s Prime Minister Benjamin Netanyahu was on an official visit to Washington.

Israel’s war on Gaza

Meanwhile, Israel, which shattered the fragile ceasefire on March 18, has continued its war on Gaza. Its blockade of aid entering Gaza further worsened the situation, prompting the president of the Red Cross to describe the humanitarian situation in Gaza as “hell on earth”.

“We are now finding ourselves in a situation that I have to describe as hell on earth …People don’t have access to water, electricity, food, in many parts,” Mirjana Spoljaric, president of the International Committee of the Red Cross, told Reuters at its headquarters in Geneva.

World Health Organization chief Tedros Adhanom Ghebreyesus also warned of more diseases and deaths due to the blockade. According to Gaza’s health ministry, the war has killed at least 50,886 Palestinians and wounded 1,15,875.

On Wednesday, Indonesian President Prabowo Subianto offered temporary shelter to Palestinian medical evacuees and children orphaned by the Israel-Hamas war in Gaza. “We are ready to evacuate those who are injured or traumatised, and orphans, if they want to be evacuated to Indonesia, and we are ready to send planes to transport them,” Subianto said.

In another diplomatic development, French President Emmanuel Macron said France could recognise a Palestinian state in June, adding that, in turn, some countries in West Asia could recognise the state of Israel. But Israel rejected it.

Trump to Russia: Get moving on ending Ukraine war

US special envoy Steve Witkoff met Russian President Vladimir Putin this week for ceasefire talks, as President Trump urged Moscow to “get moving” on ending the war with Ukraine.

“Russia has to get moving. Too many people ere [sic] DYING, thousands a week, in a terrible and senseless war,” Trump wrote on social media on Friday.

The Russia- Ukraine war has entered its fourth year. Ukraine has endorsed a US-brokered ceasefire proposal, but Russia has blocked it by imposing far-reaching conditions.

Meanwhile, US and Ukrainian officials held talks on Friday on a US proposal to gain access to Ukraine’s mineral wealth. However, no breakthrough was reported, according to Reuters.

The stalemate is caused by the latest proposal by the Trump administration, which is reportedly more expansive than the earlier version. Also, the proposed deal does not offer US security guarantees to Ukraine – a key concern of President Volodymyr Zelenskyy.

As the ceasefire remained elusive, European nations pledged over 21 billion euros ($24 billion) in military aid for Kyiv.

‘Breathing space’ for African nations

Meanwhile, in a separate but significant development, the announcement of the 90-day pause provided “breathing space” to African nations too, as they were grappling with some of the steepest reciprocal tariffs from the Trump administration.

Lesotho, Madagascar and South Africa were threatened with some of the highest tariff rates. Lesotho was threatened with the 50 per cent tariff (the second highest after China), Madagascar with 47 per cent, and South Africa with 30 per cent that were due to come into effect Wednesday.

However, the sweeping cuts to US foreign aid budgets undermined medical care programmes in African countries. In South Africa, some organisations and certain programmes had to shut down due to the lack of funding, while in South Sudan, children are severely affected because of aid cuts.

Amidst all this, Congo’s government and Rwanda-backed M23 rebels held talks in Qatar this week aimed at addressing the decades-long conflict wreaking havoc in eastern Congo. The conflict flared up in January this year when the M23 rebels captured the strategic eastern Congolese city of Goma, followed by the town of Bukavu in February.

The instability in the Great Lakes region comprising 10 countries, including the Democratic Republic of Congo (DRC) and Rwanda, has significant implications for India’s economic interests, geopolitical aspirations, and peacekeeping responsibilities, particularly when other countries, including China, are scrambling to expand their footprints in the region.

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