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External Affairs Minister S. Jaishankar has revealed that India and the United States are engaged in “very open and intense discussions” regarding trade. This comes after Prime Minister Narendra Modi and then US President Donald Trump agreed to conclude a bilateral trade agreement by the fall of that year.
Speaking at an event in Delhi hosted by the Asia Society, Jaishankar highlighted the progress made in trade talks and recalled Commerce and Industry Minister Piyush Goyal’s visit to the US earlier that year.
Strengthening Defense and Trade Partnerships
When asked about trade agreements between India and the US, Jaishankar emphasized the positive shifts that had emerged from the discussions between Modi and Trump.
“When we went to Washington in February when Prime Minister went and the discussions that he had with President Trump, I think overall our assessment was that we saw many changes which suited us or which in some ways formed a convergence on which we could build upon,” he noted.
Jaishankar particularly pointed to the defense sector as a key area of cooperation. He observed that Trump’s administration was “much more open and much more active in terms of building a security defense partnership and much more forthcoming about American technology possibilities.”
This shift suggested a new level of engagement between the two nations, offering India access to advanced American defense technology.
Bilateral Trade Agreement in the Works
India and the US were preparing to negotiate a landmark Bilateral Trade Agreement (BTA) amid the Trump administration’s plans to impose reciprocal tariffs on trade partners, including India.
Jaishankar acknowledged Trump’s active involvement in ensuring smoother transactions in defense procurement. “Our own experience in the first term, in his first term was that he personally took an interest in ensuring that some of the platforms which we had an interest in, which we wanted, which were sort of meandering their way somewhere through American bureaucracy, that he stepped in and made sure that this happened.”
Trump had previously criticized India’s high import duties, particularly on automobiles, stating, “India charges us auto tariffs higher than 100%.”
While addressing Congress, Trump announced that reciprocal tax measures would be implemented, reinforcing his administration’s push for fairer trade terms.
Energy and Technology: Expanding Cooperation
Beyond trade and defense, energy security was also a key topic in discussions between the two countries.
Jaishankar underscored India’s need for a “stable, reasonable, predictable energy environment” given its heavy reliance on imports.
He pointed out that while India had been importing liquefied natural gas (LNG) from the US for about a decade, there was significant potential for increased imports due to America’s role as a “very, very stable supplier.”
On the technology front, Jaishankar emphasized the importance of Big Tech in fostering economic collaboration. “The success of BigTech is essential to make America great again. There is a connection between the two, and I think BigTech recognizes the importance of mobility and talent flows and the importance of partnerships,” he stated.
He also pointed to the need for “trusted vendors, trusted partners, and transparent partners” to build reliable global supply chains, a discussion that reflected the growing significance of digital and technological partnerships between India and the US.
India’s Stance on RCEP and Fair Trade Practices
Jaishankar also addressed India’s decision to stay out of the Regional Comprehensive Economic Partnership (RCEP), citing concerns over trade imbalances and unfair competition.
“We continuously sought protections and safeguards because we had apprehensions about a surge of imports essentially spurred by non-market and subsidy support. We didn’t get it, the RCEP partners did not take our concerns seriously,” he explained.
He further stated, “At the end of the day, finally, forgive my saying it, presented us with a take it or leave it situation. And we left it.”
India’s hesitance to join RCEP stemmed from concerns about a “hollowing out” of its industrial capacity due to excessive imports from certain economies.
Jaishankar remarked, “Already we are today struggling with some very serious adverse trade balances. There are deep concerns in this country about the hollowing out of our industrial capacity. We believe that we’re getting again a lot of unfair competition out of economies east of India.”
The Road Ahead for India-US Relations
With trade negotiations in full swing, India and the US were actively working to shape a mutually beneficial economic relationship.
According to Jaishankar, both nations remained committed to reaching a bilateral trade agreement, and discussions had already progressed through virtual channels following Goyal’s visit to the US. “So, there’s a very active and intense trade discussion going on at this point of time,” he confirmed.
The evolving partnership between India and the US continued to expand across multiple sectors, from defense and trade to energy and technology.
As both nations navigated complex economic and geopolitical challenges, these discussions underscored the commitment to fostering stronger bilateral ties in the years ahead.
