New Delhi – External Affairs Minister S. Jaishankar has reiterated that any trade deal between India and the United States must respect India's "red lines," as both nations continue efforts to find common ground. Speaking on Sunday at the Kautilya Economic Conclave, Jaishankar acknowledged existing issues in the bilateral relationship, largely stemming from the inability to finalize a proposed trade agreement.
Jaishankar emphasized the necessity of a trade understanding with the U.S., being the world's largest market, while also underscoring India's firm stance on its non-negotiable "red lines". These "red lines" reportedly pertain to protecting the interests of Indian farmers, small-scale industries, and fishermen. Specifically, India is hesitant to grant the U.S. easier access to its agriculture and dairy sectors. Prime Minister Narendra Modi has also affirmed his commitment to safeguarding farmers against any market flooding of American goods.
Negotiations between India and the U.S. have seen a recent resumption after a brief pause. Despite the ongoing discussions, Jaishankar admitted that both sides have not yet reached a "landing ground" in their trade talks. He stated that India has been in talks with the U.S. for a trade understanding where "our bottom lines and red lines are respected" and that "there are things you can negotiate and there are things you can't".
The relationship between New Delhi and Washington has faced considerable strain after the previous administration imposed significantly increased tariffs on Indian goods, including additional duties on India's purchase of Russian crude oil. Jaishankar described these tariffs as "unfair, unjustified, and unreasonable". He highlighted the imposition of a 25% punitive levy for sourcing energy from Russia, especially when other countries with "far more antagonistic relationships with Russia" have not faced similar penalties.
Despite these trade-related challenges, Jaishankar downplayed the notion that these issues would negatively impact all aspects of the India-U.S. relationship. He suggested that many dimensions of the engagement continue as "business as usual" or are even seeing increased activity.
Jaishankar also touched upon broader shifts in global dynamics, including the "weaponization of everything" and the growing trend towards competition. He noted the U.S.'s emergence as a significant energy exporter and China's leadership in renewable energy.
While acknowledging the existing problems and issues, Jaishankar expressed hope for resolving them through continued negotiation and discussion. Both countries aim to achieve a mutually beneficial trade agreement, although sticking points remain. Recent talks held on the sidelines of the United Nations General Assembly in New York failed to resolve the tariff dispute, with India urging the U.S. to drop levies linked to Russian energy imports. India is reportedly pushing for overall tariffs to go below 20% to maintain competitiveness against other manufacturing hubs in East Asia.
