External Affairs Minister S. Jaishankar on Sunday made it clear that any trade agreement between India and the United States must respect New Delhi’s “red lines”, even as discussions continue to find a mutually acceptable “landing ground”. His remarks come at a time when bilateral relations have been under strain over Washington’s tariff policies.
Addressing an interactive session at the Kautilya Economic Enclave, Jaishankar conceded that there were some pending issues between India and America, most of which are the result of the lag in finalizing a long-standing trade agreement.
He stressed that although getting to a trade agreement with the US — the world's biggest market — was important, it should not come at the cost of India's fundamental interests.
“We have today issues with the United States. A big part of it is the fact that we have not arrived at a landing ground for our trade discussions, and the inability so far to reach there has led to a certain tariff being levied on India,” he said.
Explaining further, Jaishankar added that India also had a "second tariff" which it found "extremely unfair" and was imposed on it as a result of its continued import of Russian crude oil, even as many other countries — including those having much more hostile relations with Moscow — were similarly importing it.
“In addition, there is a second tariff which we have publicly said we regard as very unfair, which has picked on us for sourcing energy from Russia when there are other countries that have done so, including countries that right now have a far more antagonistic relationship with Russia than we do,” he said.
The tensions between New Delhi and Washington have risen after President Donald Trump unveiled a dramatic hike in tariffs on Indian goods — raising them to 50% double from before, plus a further 25% levy tied to India's imports of Russian oil. India condemned the action as "unfair, unjustified and unreasonable."
Jaishankar stressed that even though a trade agreement with the US is necessary, it has to be based on equality and respect for each other.
“Whatever happens at the end of the day, there has got to be a trade understanding with the US... because it is the world’s largest market but also because much of the world has reached those understandings,” he said.
“But it has to be an understanding where our bottom lines, our red lines, are respected. In any agreement, there are things you can negotiate and there are things you can't.”
He said New Delhi's position is strong and clear.
“I think we are pretty clear about that. We have to find that landing ground, and that's been the conversation which has been going on since March,” he noted.
Jaishankar also explained that even though there has been this ongoing trade tension, the overall relationship between India and the US is stable and multidimensional.
“There are problems, there are issues, nobody is in denial of it. Those issues need to be negotiated and discussed, and resolved, which is exactly what we are trying to do,” he said.
“I would really hesitate to read very much more into it than the issues themselves. I think I also want to say a large part of the relationship is actually continuing either as business as usual or, in fact, in some cases even doing more than it was doing before.”
Talks between India and the US on the proposed trade pact resumed recently after a temporary lull, indicating that both nations are eager to close the gap and consolidate economic cooperation.
Talks between India and the US on the proposed trade pact resumed recently after a temporary lull, indicating that both nations are eager to close the gap and consolidate economic cooperation.
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