The world this week | Trump’s Gaza peace plan hangs in the balance; India recalibrates strategy amid tariff strain

US President Trump has welcomed Hamas’s response to his 20-point Gaza peace plan ahead of the Sunday (October 5) deadline, and asked Israel to immediately stop the bombing of the Palestinian territory. Following Hamas’s response, India also hailed Trump’s Gaza peace efforts. 

In its response to the Gaza ceasefire proposal, Hamas said it has agreed to free all the Israeli captives, dead and alive, according to the exchange formula contained in the proposal. It has also affirmed its readiness to hand over the administration of the Gaza Strip to a Palestinian body of independent technocrats.

However, the militant group stopped short of making its stance clear on key demands of the peace plan – that Hamas agree to its disarmament and to playing no further role in the governance of Gaza. The group added that the part of the proposals dealing with the future of Gaza and the rights of Palestinian people was still being discussed “within a national framework”, of which it will be a part.

Nonetheless, following Hamas’s response, Israeli Prime Minister Benjamin Netanyahu’s office said Israel was preparing for an “immediate implementation” of the first stage of Trump’s Gaza plan for the release of Israeli hostages, according to Reuters. 

In the meantime, media reports say that Israel has continued its offensive and killed at least 72 Palestinians across the Gaza Strip on Friday (October 3). On the same day, Israel intercepted the last vessel of the Gaza Sumud Flotilla – made up of at least 44 civilian boats with some 500 activists on board carrying humanitarian aid to the besieged strip.

The interceptions of the flotilla boats – one of the largest aid missions to attempt to break Israel’s blockade of the Palestinian territory – and the arrest of the activists, including Greta Thunberg, triggered protests across continents. Tens of thousands of people took to the streets in Italy, Spain, France, Switzerland and other countries to protest the arrest of the activists and to demand an end to the war in Gaza.

Peace plan and the Palestinian state 

Notably, the Gaza peace plan has been unveiled at a time when a groundswell of support for Palestine is evident in public protests across countries, besides diplomatic isolation of Israel, and the growing recognition of the Palestinian State.

It prompts examination of the Arab and Muslim countries’ support for Trump’s Gaza peace plan, especially on account of not just the denial of agency to the Palestinians but also the ambiguity over the timeframe for the withdrawal of Israeli forces from Gaza and for the emergence of a Palestinian State. 

Although the peace plan was reportedly backed by eight Arab and Muslim nations – Saudi Arabia, the UAE, Qatar, Egypt, Jordan, Turkey, Pakistan, and Indonesia – Islamabad said that the plan was not in line with a draft presented during a September 22 meeting with Trump on the sidelines of the UN General Assembly. 

According to the plan, the “temporary transitional governance” of a “technocratic, apolitical Palestinian committee” will be supervised by a new international transitional body called the “Board of Peace”. The body will be headed by Trump and would have other heads of state, including former British Prime Minister Tony Blair – a point that Hamas said it is not willing to accept. The inclusion of Blair has raised hackles for several reasons, including:

— Blair sided with then US President George Bush in rejecting the results of the 2006 Palestinian Legislative Council elections, regarded as “free and fair” by international observers, in which Hamas won a huge majority. 

— Blair was famously held responsible for manufacturing evidence of the presence of Weapons of Mass Destruction (WMD) that provided the justification for the US invasion of Iraq in 2003. 

— His consultancy firm is seen to be responsible for plans to reconstruct a ‘riviera-like’ Gaza.

Moreover, Trump’s peace plan made no mention of the two-state solution. Rather, soon after unveiling the plan, Israeli Prime Minister Benjamin Netanyahu was reported as saying, “It’s not written in the agreement. We said we would strongly oppose a Palestinian state.”

Hence, the future of Trump’s peace plan hangs in the balance for now. At best, the plan ostensibly helped the US ease tensions with Qatar after Israel attacked a residential compound in Doha last month, where Hamas’s negotiating team was discussing a previous US ceasefire proposal.

The Israeli attack on Qatari territory was seen as a violation of its sovereignty and triggered an angry Arab response, raising questions over the viability of US-led security architecture, particularly for the Gulf Cooperation Council (GCC) states, which host some of the largest American military air bases in the region. 

Moreover, the growing isolation of Iran, particularly after the reimposition of sweeping UN economic and military sanctions, and the dismantling of its axis of resistance, seems to offer a favourable ground for Israel and the US to advance the so-called Gaza peace plan.  

India recalibrates its strategy amid US’s hardened position

Although India stands by Trump in his Gaza peace efforts, its ties with the US continue to face challenges, with the fresh set of tariffs on pharma products, furniture and heavy trucks kicking in from October 1, and Indian exporters struggling hard to maintain competitiveness in the American market. 

Indian exporters, especially those who have 100 per cent exposure in the US market as well as those in labour-intensive sectors such as textiles and apparel and gems and jewellery, are seeking urgent relief measures from the government amid fears of rising risk of job losses.  

Trump’s decision to charge new applicants for the H-1B highly skilled non-immigrant visa $100,000, nearly six times the current fee, has added further strain to the ties. Indian nationals reportedly account for 71 per cent of these visa applications for the upcoming fiscal year, which, nonetheless, dropped to a four-year low of about 3,59,000.

However, experts and analysts largely zero in on a few measures to contain the fallout for Indian citizens, including infrastructure upgrade, necessary reforms in the tech industry and shifting focus to new markets across Asia and Europe. Here China’s K-visa merits a mention, which has become effective from October 1 and promised greater flexibility in terms of entry frequency and validity period. 

The K-Visa, as part of China’s stress on Science and Technology and the need for establishing an internationally competitive talent system, offers an interesting lens through which to examine Trump’s economic rival approach to almost the whole world. It is widely noted that the US, rather than other nations, would bear the brunt of the H-1B visa fee hike in terms of the shortfall of scientific and engineering expertise, undermining economic growth. 

Delhi’s strategic gains

While talks between India and the US resumed last month, no new dates for formal negotiations have been released by the government. At the same time, the resolution of the Russian oil issue remains central to the trade deal between the two countries.

Against this backdrop, New Delhi is apparently recalibrating its strategy, especially on its eastern front. In a fresh push to globalise the rupee, it has authorised Indian banks and their overseas arms to lend in rupees to residents and institutions in select neighbouring countries (Nepal, Bhutan and Sri Lanka). 

New Delhi has also expanded the list of currencies for benchmarks. India currently has reference rates with the US dollar, euro, pound, and yen. Notably, Trump has warned BRICS (Brazil, Russia, India, China and South Africa) against replacing the dollar in international trade. 

In addition, as the Russian oil issue remains central to India-US trade talks, which led to an additional 25 per cent penal tariff, alongside a 25 per cent reciprocal tariff, Russian President Vladimir Putin said that Russia may import more agricultural products and medicines to offset India’s ‘losses’.

“The losses faced by India due to punitive US tariffs would be balanced by crude imports from Russia, plus it will gain prestige as a sovereign nation,” said Putin, who is slated to visit India in early December. 

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