Foreign Minister S Jaishankar | Photocredit: Ani
In a movement that perhaps marks a shift in the way India approaches trade discussions with the US, the Minister of Foreign Affairs S Jaishankar has firmly refuted the claim of the US in recent weeks, which India has agreed to zero rates for the import of the US. Jaishankar’s statement last week clarifies that trade conversations are on the basis and ‘nothing is decided until everything has been decided’. India released the air and it was high time it did. It coincides with the upcoming trade discussions between the two countries this week; Minister of Trade and Industry Piyush Goyal is in the US with his team of negotiators.
Since 8 April, when President Trump hit his mutual rates in 57 countries with a 90 -day deadline for them to get into force, his administration has gone overboard in raising the pressure on India. The gamble here is roughly simple – to force India to force a deal in these 90 days, before 8 July, to escape the 26 percent rates that are expected to start afterwards. The same trick has also been played with the rest of the world, so there are quite a few countries to stand in line for conversations with the US. In the case of India, Trump and his colleagues have cynically generated a lot of confusion. India has maintained a studied silence in the light of zero tariff claims. The reluctance of it was perhaps aimed at ensuring that the conversations went in good faith. But the actions of us have marred the process. Trump has proposed a ‘Big Beautiful Bill’ that can ‘load’ 5 percent of $ 32 billion NRI Remittance outflow. India should be careful in the light of pressure, without allowing the US to put the pace in the conversations. A bad deal in hurry is much worse than none at all.
In the meantime, India sent a sharp message that it will look forward to its interests. In a throwback to Trump 1.0, India has presented retaliation actions on the rates of the US on steel and aluminum. However, it must also work out a plan with regard to other areas. In the beginning it must be clear that the interests of the US in India itself go beyond the convincing of India to change its regulatory systems with regard to GM food, e-commerce, large tech, pharmaceutical and other high-tech sectors. It is also enthusiastic about access to India’s food (corn and soybean) and dairy sector, in addition to the sale of defense equipment and oil. India has enough in his toolkit to squeeze a deal that does not harm its interests. A levy on e-commerce monopolies, a limit for royalty payments, the application of data localization rules and compulsory licenses of patented medicines can be used to ward off a negative result.
There is room to reduce rates in products that rated zero with other FTAs. A deal that yields rates on Indian goods up to 10 percent is possible without much sacrifice. But Trump’s bluff and bluster should be called up, whether it is trade or business of national security, even if we keep our ties with us on an even keel.
Published on May 18, 2025
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