EAM Jaishankar Explains Why India And The US Haven’t Reached A Tariff Deal Yet

External Affairs Minister S. Jaishankar has clarified that the continuing US tariffs on Indian exports stem from a lack of consensus between New Delhi and Washington. While discussions remain ongoing, Jaishankar emphasized that India's fundamental "red lines" must be respected before any agreement can be finalized.

The Tariff Standoff

Jaishankar explained that India is in active talks with the United States to resolve the steep tariffs, including a 50% duty on Indian goods and a 25% tariff linked to India's crude oil imports from Russia. He underscored that any settlement must uphold India's essential interests and policy priorities. Despite these trade hurdles, Jaishankar expressed optimism that the tariff issue would not cast a shadow over the broader bilateral relationship, noting that much of India-US trade continues unaffected and remains "business as usual."

The minister further observed that the global "rules-based international order" has eroded in recent years, changing the way nations approach trade. According to him, considerations such as ownership, security, reliability, and resilience have become just as crucial as cost in shaping trade policies.

Free Trade Agreements and Supply Chain Issues

Jaishankar also discussed India's Free Trade Agreements (FTAs) with various Asian economies, pointing out that some of these arrangements have proven challenging due to competition from stronger regional players. He cautioned that certain FTAs have unintentionally created openings for China through existing supply chain linkages.

To safeguard national interests, Jaishankar said India must focus on FTAs with economies that are not directly competitive, ensuring better strategic and economic outcomes. He further acknowledged that India has "lost decades" in the manufacturing sector and stressed the importance of strengthening both advanced and traditional industries to achieve a balanced and resilient economic foundation.