Fareed Zakaria exclusive interview – Under Trump India can find a way to become manufacturing powerhouse Fareed Zakaria

Veteran journalist and geopolitical expert Fareed Zakaria offered a comprehensive analysis of Donald Trump’s second term as US President, highlighting its global implications, particularly for India.

In an interview with India Today TV’s News Director Rahul Kanwal, Zakaria discussed the future of US-India relations under Trump, along with the shifting US-China dynamics, which he believes offer India a significant opportunity as American businesses reduce their reliance on China.

He also spoke on Prime Minister Narendra Modi’s third term, noting a renewed focus on political strategy and growth, though with little change on social issues like minorities and the judiciary.

Zakaria delved into key global issues, including the Russia-Ukraine war and the Israel-Iran conflict.

Here’s the complete transcript of his interview:

On what to expect from Donald Trump’s second term

It’s hard to tell because Trump really, more than any president I can remember, really perhaps more than any world leader, is a personality more than a programme. It’s his personality that determines everything. Does he feel like he likes another foreign leader? Does he feel like there’s a deal here where he’s going to look good? It’s all about that. So with that caveat, because you really have to say that, you know, would anyone have guessed that in the first Trump term, Donald Trump, the great hardline Republican hawk, would fall in love with Kim Jong-un, the dictator of North Korea? Why did he do that? I think he, somebody convinced him that if he got a deal with the North Koreans, he would win the Nobel Peace Prize.

So, it became really more about him than about, you know, a realistic appraisal of what the prospects for a deal were. I think what we can say is this – Trump, in the first term, came to office by his own admission and certainly the admission of his closest lieutenants. He didn’t expect to win, so he comes into office and he essentially takes on the Republican establishment.

His first Chief of Staff was Reince Priebus, the head of the Republican National Committee. He takes on the former CEO of Exxon as his Secretary of State, Rex Tillerson, because he thought he knew the world, things like that.

That is not what Trump 2.0 is going to be. Trump has realised that all those people were not ultimately loyal to him. He appointed a lot of generals in the first Trump term, and I think he discovered that those generals, when he would order them to do something if they believed it was not in the Constitution, not legal, or maybe even violated certain ethical codes, they wouldn’t do it.

So, it seems to me, that the lesson he has taken from the first Trump administration is you need people who are absolutely loyal to you. And whose loyalty would not make them question your directives, even if they are ethical concerns they have or constitutional concerns.

So, at one level, it’s a little worrying, but it tells you who you’re getting. This is going to be a much more full-throated Trumpian group. And what do we know about the appointments he’s made? Marco Rubio is a very talented politician, the national security adviser, again, a serious guy who has foreign policy experience. They’re both very hawkish on China. And, I think that, in general, what you would have to guess from what you’re seeing is that there will be a pretty tough policy on China. What’s also happened is there’s been a broad shift over the last 10 years in the United States in the kind of strategic elite’s perception of China.

Because in a classic pattern in international relations where each side does one thing which causes the other, they have watched Chinese manoeuvres and felt that the Chinese are essentially building a military that is designed to defeat the American Navy in Taiwan. Designed to really replace the United States as the leading power in the Indo-Pacific. So I think you’re going to see a much more hawkish policy on China. Trump has always said he loves Modi. So, I think there will be a continuation of the policy toward India. The truth is, while we have these very colourful changes in America, and if you think about it, you went from Clinton to Bush to Obama to Trump to Biden. US policy toward India for the last 25 years has been remarkably consistent and upward moving, and so I think what you’re likely to see with India is the continuation of that upward moving trajectory, closer and closer cooperation, greater and greater determination to create an Asia where you have less dependence on China and greater interdependence with India.

On ‘liberal media’ bias against Trump

In this election, I never argued that Kamala Harris would win. It’s ironic they’re using a clip from eight years ago, but the truth is this election, I always said, was too close to call. Privately, honestly, I did think Trump would win. I thought very narrowly. Let’s look at the final results, and it appears that Trump has won by about 1.5% of the popular vote, which is less than Biden won by, less than Obama won by, less even than George W Bush won by in 2004. So it’s not an overwhelming victory. It’s a solid victory, but it’s one of the smaller victories.

If you tally American presidential elections, I think something like 50 out of 60. I think that in 2016, I definitely thought Trump would not win, partly because, you know, if you looked at the polls, Hillary Clinton was leading by 7 or 8 points. The really interesting question is not that there’s a liberal media bias about this. That’s silly. It’s that there is a persistent problem in polling which is not picking up Trump voters. And there are 2 or 3 reasons why this seems to happen.

One is that Trump has upended. The political coalitions, he appeals to some people, when you, he turns off some people who were used to be reliably Republican, the party has changed so much. It used to be the party of the rich and the upper middle class. It’s now the party of the poor and the working class.

So in the midst of that, when you’re polling, and you make these adjustments because obviously you don’t, you’re polling a sample, and then you’re trying to adjust, I have too few blacks, I have too many women, and you adjust. In that adjustment, are you missing these shifts that are taking place? The second is that Trump voters seem to be shy. They use that phrase, meaning they are less willing to talk to pollsters. They are less willing to tell pollsters whom they’re going to vote for. And in that context, you’re getting some underrepresentation. There’s a very interesting analysis that was done by somebody, a Republican pollster, who decided to ask differently.

He said, not whom are you going to vote for? Who do you think your neighbours are voting for? And he got a much higher response for Trump. So, in other words, people are saying, I don’t want to admit to you that I’m voting for Trump, but all my neighbours are voting for Trump.

So maybe there needs to be more clever calculation around this, but I would say that to me, the lesson actually, which is a very healthy lesson, is that polling is a very imperfect science. When I was getting my PhD in social science, we had to do a lot of this kind of statistical analysis, and I was always conscious of because what assumptions you make massively affects the…Are you assuming that you need to adjust for non-college-educated black men? Because it turns out that that’s a very significant group who trended a little bit toward Trump. If you didn’t make that adjustment, you know, because you can adjust for 1,000 categories, the ones you choose are the ones that determine, so it’s a little bit more of a kind of technical problem.

Now, I don’t want to pretend, by the way. The media is generally liberal. That’s true. Just as academia is generally liberal, just as, by the way, consulting firms are generally liberal. The big divide in America right now is college education.

If you have the single strongest predictor of who you voted for in these last 3 elections has been, do you have a college degree or do you not? If you have a college degree, you’re much more likely to have voted for Kamala Harris. If you don’t have a college degree, you’re much more likely to have voted for Donald Trump. So, of course, the professions that have lots of people with college degrees are going to skew left.

On Trump’s tariffs

Trump is mostly an opportunist and a practical political dealmaker. I think that a lot of what he says you have to take with a grain of salt. Some of his programmes will fade away, I think. The one thing about tariffs and that general protectionism is that Trump has held this view forever. For all the other views have come and gone, his first political statement was in 1985, when he was a candidate, when he was a real estate developer. He was a candidate for nothing. He took out a full page ad in The New York Times, and it was an ad saying that the Japanese in those days – that was the fear the Japanese were going to take over the world – the Japanese are engaging in vicious, unfair trade. We should not be taking this lying down. We should slap tariffs on them. We should do all these kinds of things.

And by the way, Europeans are also terrible because they don’t pay us enough for our security. So those are the two things he’s always believed, particularly on tariffs. So it’s hard for me to believe that nothing will happen. I mean this is a guy who said many, many times that he’s going to put 10% tariffs, and sometimes he says 20% on everybody, 60% on China.

I think there is an element of threat and bluff, but there will be some tariffs. I think there’s no question there will be some tariffs, and he’s singled out India as having very high tariffs, which is true. India is probably the most protectionist large economy in the world today. So as somebody who basically believes that India would do much better with more open trade and would lift many, many people out of poverty, if you were to be more integrated into the world economy. I hope that Trump actually has the effect is that he threatens India with tariffs. India decides in response they have to do a deal. Part of the deal is that Indian tariffs go down. That would be great, but the overall effect of Trump tariffs will be probably greater protectionism in the world, less trade, less economic interaction, which in the long run is not a great thing.

On US-China dynamics from India’s perspective

For India, this is a golden opportunity. Trump is almost certainly going to put higher tariffs on China than anyone else. Even if they come up with a deal, I think there will be more tariffs on China. But even beyond that, American business in general is on a long de-risking process away from China.

If you’re an American CEO and your only supplier is China, you are actively seeking to change that. Every American…see if you have 70% of your production, you’re trying to get it to 50%. So the arrow is only moving in one direction. So far, to be fair, to be honest, India has not benefited that much from it. The major countries that have benefited are Vietnam, Mexico, a little bit Malaysia. India has not yet been able to be the manufacturing powerhouse that could replace China.

And I don’t have to tell you there are all kinds of problems, regulatory problems, labour problems, why India is not a manufacturing powerhouse, and it still isn’t. There is some hope in some areas. The Apple iPhone production is a very promising sign, but there are all kinds of problems. The simplest one, for example, is because India is so protectionist, a lot of manufacturing is now actually assembly. So, you have to import intermediate goods from other countries, and India has very high tariffs on those. So until that’s all lowered and regularised, it’s hard. But now, if this push gets even further, you’re going to need to find scale because if you’re going to get your production in China from 100% down to 80%, you can fill that 20% with Vietnam.

But if you’re going from 100 or 80% now to 40%, you need scale, you need volume. Only India can potentially provide that, so it’s a real golden opportunity. And what India should be trying to do is not so much go for the very high-end chips and things like that, because you’re going to be able to do one or two signature projects like that. But India is a poor country. It has a per capita GDP of 2,700, 2,800. Where it can excel is in large scale manufacture of everything because it has cheap labour, it has land, it has the capacity to organise all this. So, if it were to take this opportunity, India can find a way to become a manufacturing powerhouse that it has still not yet been.

On global pushback against incumbents

The global anti-incumbent feeling is extraordinary. There’s a data analysis done in Europe where they took the voting patterns over the last 120 years, and there has never been a year like this one – the last 12 months where every incumbent party that was up for election in the industrialised world lost.

And pretty much, every incumbent party throughout the world suffered significant setbacks, or was voted out of office. Modi is probably the most important exception. I think there are one or two others, but it’s the most important exception. Now why did it happen?

The first thing fundamentally one has to say is India does not have a two-party system, and if there had been a two-party system where every BJP person was up against one non-BJP MP, it is likely that the BJP would have lost power, because what happened in India is the anti-incumbency vote often got divided between two or three major parties. So that’s number one, but the second is you’re right. Modi has bucked the trend because I think he is personally very popular, even though there’s a feeling of – anti-incumbency, things have been too chaotic, inflation was high, Covid was not handled well. He has somehow managed to maintain a sense of trust and connection with the Indian people, and it’s because, at the end of the day, Modi is still seen by Indians as something of an outsider. He’s seen as somebody who came from outside the world of political elites, which is true. He is really in many ways the first genuine outsider to become Prime Minister of India, and it’s a testament to a skill that, despite being Prime Minister for 10 years, he’s still viewed that way. But that is the key to the places where you have seen success. So, if you look at the United States over the last 20 years, there have been two figures who have dominated American politics – Barack Obama and Donald Trump. They’re totally different, except in one respect. They’re both outsiders to the political system.

On Modi 3.0

The most interesting thing, which is sort of predictable, I suppose, is that you see a renewed determination and emphasis on getting the politics right. Modi viewed the dramatic loss of his majority as a wakeup call. So, if you look at the various state elections, the BJP is utterly organised, determined, driven. They’re spending. They’re outspending the opposition by even more. I mean, maybe they were outspending them by 5 to 1. Now they’re outspending them by 10 to 1. You see the political determination of Modi coming through very strongly. But in policy terms, actually, what I’m struck by is the continuity. Modi is doubling down on the growth agenda. He is continuing to try to push infrastructure, all those things, which is actually very welcome, because I think what you’re seeing is a much greater sense…The elections did not result in him saying – OK, I’m going to abandon all this because it might be disruptive, or I’m going to entirely go to pandering populist politics of giving away free visas. It’s not that.

There is a real growth agenda, and I think India benefits from it. On the social side, in terms of Muslims, minorities, rule of law, judiciary – again, I don’t see much change one way or the other. So, in a way with Modi, you see what you get. And people who are hoping you get a softer, gentler Modi on issues like minorities, I don’t see that. He seems to have a formed view politically in that way, and it’s playing out.

On India-China relations

Nobody really knows the answer. Nobody really understood why the People’s Liberation Army (PLA) pushed in the Himalayas as they did in the first place. The puzzle is this, which is that Xi Jinping has had a more aggressive policy, foreign policy, since he came into power, but it was mostly directed at staunch allies of the United States or the United States itself. US, Australia, Taiwan, those were there. But he also….you saw this incursion in India. There’s a part of me that thinks there is something going on in that area which is in the conception of the hardliners in Beijing is vital to their national security or to their sense of national unity.

Remember this idea of national unity is very important for the Chinese and the area, as you know, is essentially part of Tibet. And, Tibet is part of their conception of the unity of China is centrally involves the idea of control of Tibet, control of Mongolia, control of Taiwan. These are the core issues because they have solved, I think I’m right in saying this, they have solved 15 of the 16 border disputes they have with their neighbours. The one they have not solved is India. So there is some issue that, for them, is very sensitive. And so I think what happened in the incursion in the first place is it might have been some misunderstanding or miscalculation. The local commanders went forward, but they were not willing to pull back. They were not willing to compromise. Now why has he changed? I think Xi has realised that his whole wolf warrior diplomacy has failed. They tried in Australia to blackmail the Australians with the sort of 14 demands. It went nowhere. The Australians didn’t budge. They tried in the Philippines. The Philippines became more pro-American. They’ve tried in Southeast Asia in general. It hasn’t worked. They tried in Europe. The Europeans are more aligned with the US strategy toward China.

There’s a fundamental misunderstanding the Chinese have of their rise. Maybe they look at their rise and they look at America and say, America rose to power and just became more and more influential. America’s rise is very unusual because America is surrounded by two vast oceans and two very weak neighbours, so America’s rise does not essentially inherently threaten anyone.

And America is often seen as far away – this far-off power occasionally comes in, restores the balance of order, interferes depending on your point of view, but it goes back. China is rising in the middle of a very crowded continent. Right next to China is India, Japan, Vietnam. And as China rises, it makes countries like that very anxious and insecure. And so I think they’ve handled their rise completely wrong. They should have been much more accommodating. That was the Deng Xiaoping model. And maybe there’s a course correction taking place, but you’ll notice it’s a fairly modest course correction. I mean if I was Xi Jinping, I would say the way you outfox the Americans is that you make closer and closer deals with India. And, Modi was not opposed to that when Xi Jinping came to power. People often forget that Modi’s first use of the word was multi-aligned foreign policy. When he started talking about a multi-aligned foreign policy, India had very good relations with China, and many people interpreted that to mean I’m going to have good relations with America and with China.

The Chinese squandered that and so, if they could find a way to manage to have closer economic and technology and political ties with India, that would throw the biggest spanner in the wrench in America’s strategy in Asia. But they’re still not able to do it because I think Xi still, at some level, believes – look, we are the leading power in Asia. We should be given the respect we deserve. Other nations should be kowtowing to us, not literally in the old Chinese sense, but should be paying us deference. And of course, India is never going to pay China deference.

On future of Russia-Ukraine war

I think that there’s a good prospect that there’s a deal to be had. The truth is it was already moving toward that. Because over the last several months, it has become clear that the Russians are not going to be displaced from the 20% of Ukraine that they hold. The Ukrainians have made very brave, valiant efforts. They’ve dislodged them a little bit from the positions that they held in that first flurry in 2022 when they took over parts of Ukraine. But Crimea, the core piece of Donbas that they hold, they are going to hold. Now on the other hand, it’s also worth saying the Russians have made no advances either. The Russians have not been able to take much more of Ukraine.

There’s a deal to be had, which is if Trump makes it clear to Putin – look, there’s a deal to be had roughly along the lines we are at now, we can freeze the lines now. But if you try to make more advances, I will keep funding the Ukrainians.

There’s a deal to be had if Trump wants the deal. But the deal does involve the threat to Putin that he will keep funding Zelenskyy. So here’s the way I think about it. There’s a great opportunity for Donald Trump to say – I made the deal. Joe Biden didn’t. I made it. It happened on my watch. I’m great. I’m the great dealmaker. I ended the war. But, it does require him to be tough on Putin. Now, on the other hand, I think what you’re hinting at is he doesn’t seem to like the Ukrainians. Remember, he tried to blackmail Zelenskyy in the first term, and Zelenskyy, by the way, did not get blackmailed.

Don’t forget that’s a very important thing that people sometimes forget, which is Zelenskyy defied Trump, and Trump must not have liked that. A lot of people around him; his son, for example, is openly anti-Ukrainian. Tulsi Gabbard is openly anti-Ukrainian. There are two conflicting strategies here. If I were the Ukrainians, I would try to focus on this idea that Trump can be the peacemaker. He can make the deal, but for the deal to be made, there has to be a real threat. If he does that, as I say, you freeze the lines and you have to give Ukraine some security guarantee. That’s the other part which I wonder about where Trump would be.

Because, if you don’t give them a security guarantee, Ukraine will collapse because nobody is going to invest in a country that you think the Russians could go back in two years. Even young Ukrainian men who have fled won’t come back. In fact, you might have more exodus out of Ukraine because if there’s a peace deal, the Ukrainians will have to lift martial law and the lift the mandatory draft and things like that, and the young men will leave. So you’ll have a basket case in Ukraine. So the way to end this war is clear. The question is it does require Trump to be tough on Putin. He’ll also have to be tough on Zelenskyy and say – look, we got to take this deal.

So far, what we’ve seen is, if the US and Europe continue to support Ukraine, they’re willing to fight, they’re willing to die, and they’ve done remarkably well. Remember, Russia is ten times the economy of Ukraine’s, four times the population. And it’s right next door. This is not some far away imperial conquest. It’s right next door, and they’ve still not been able to move beyond those lines that they’ve held. They’ve still not been able to take Kiev. They’ve not been able to take the other major cities. Ukraine is able to export all its grain through the Black Sea. So, if you consider the mismatch, the Ukrainians, as David, have really stood up to a Goliath. And the Russian economy is suffering enormously. The other leverage that Trump has over Putin is the sanctions are very tough now. Being an oil-exporting economy, Russia will always have some cash and they can always build their army. But they’re doing it really at the cost of the rest of society and the rest of the Russian economy, which is really in a kind of increasingly primitive state because they don’t have access to technology, they don’t have access to capital markets. So there’s a big upside for Putin to end the war.

On Israel-Iran tensions

The Gaza thing is now basically over and it’s a separate issue. It’s what Israel should do with the occupied territories, how it should handle the Palestinians, and just put that aside, both politically and humanitarian catastrophe that it is. What is going on in the north is the central strategic game. The Iranians have been trying to play a game through their proxies – Hezbollah, the Houthis, the militias in Syria and Iran, and Hamas, of putting Israel on edge but also putting the Gulf Arabs on edge. They allowed the Houthis to attack Saudi Arabia’s oil facilities. The Israelis have decided enough. We are going to reestablish deterrence, and we are going to strike hard, both at Hezbollah and in Iran. And what they discovered was that Iran and Hezbollah were much weaker than people realised, and they have very effectively reestablished deterrence where they’ve destroyed Hezbollah to a large extent militarily, but politically, it remains a very powerful organisation. And what they’ve shown, and they’ve exposed is that Iran is a paper tiger. They’ve now destroyed all of Iran’s air defences, all by the way, Russian-built air defences. India, please take note. The value of Russian kit is not very high these days. They were able to in a few hours destroy the entire Russian-built Iranian air defences. So, Iran is now naked. I think Israel is happy with where things are now. Because what they’re in a sense saying to Iran is you do something else, you take more provocative moves. One of your proxies strikes us again, and we can destroy your military facilities, your cities, your nuclear research labs.

So in a way, it’s up to the Iranians and the Iranians have said they’re going to strike back at Israel, but they’ve said it a while ago, they haven’t done anything yet. I think that’s where the game is. If they were to strike, the Israelis could very easily, absolutely destroy either Iran’s military bases or even parts of their nuclear facility. For nuclear stuff, they need American bombs. Their bombs are not powerful enough. There are special bunker busting bombs. They need that. They do not have access to right now. But they could set Iran back very, very substantially. What this whole episode has showed – Israel is the region’s superpower now. It is the military superpower of the Middle East, and by the way, it’s the technology superpower of the Middle East, and a new deterrence has been established between Israel and Iran.

On Iran’s vulnerability

The thing about dictatorships is that they seem eternal until the day they collapse, and then it seems inevitable, and you can’t believe it went on for so long. So I’m very hesitant. It’s a tough dictatorship. But my own sense is that the Iranian regime has always been able to mix repression with patronage in a way that gives it a certain stability. Iran is a very traditional society, a religious society. The Shia clergy are very, it’s very different from a Sunni state where the clergy have a certain kind of political role and respect, and you can see this even just by looking at Iraq next door.

In Iraq, which is a free democracy, the Shia tend to vote for parties that are very closely aligned with Shia religious groups, with Shia religious figures like Muqtada al-Sadr and things like that. So it’s not surprising that the Ayatollahs have some support. I don’t think it’s a majority by any means, but if you’re a dictatorship, and in the rural areas among old people, among more religious people, you have some support.

Then you dole out patronage, and you increase your support, and then you crack down hard on all these urban liberals. That seems to have been the formula that has kept the Iranian regime in power, and my gut is that it’s still a workable formula. As I say, you never know what the dictatorship, but what I will say for sure is we have now had many experiments at regime change in the Middle East in the last 20 years. Iraq, Afghanistan, if you think of that as the greater Middle East, Libya, Syria. It’s a very messy proposition. Regardless of whether it succeeds as it did in Iraq, as it fails as it did in Syria, you have mass hundreds of thousands of people, if not millions, get displaced, hundreds of thousands die. What you end up with often not that much better than what you started with. So I would say to anyone thinking of regime change in Iran as a strategy, remember this is a big country, this is not some small…Just be careful. Be careful what you wish for.

Watch Fareed Zakaria’s full interview here: