NEW DELHI:
India and the US are engaged in “active and intense” negotiations for a trade deal and the Trump administration has shown it is more open to forging a stronger partnership with New Delhi in crucial areas such as defence, energy and tech, external affairs minister S Jaishankar said on Wednesday.
Jaishankar, speaking at an event organised by Asia Society, said there is a “strong business case” for a bilateral trade agreement (BTA) with the US but declined to prejudge the outcome of ongoing talks between Indian negotiators and a visiting US team led by assistant trade representative Brendan Lynch. His comments came against the backdrop of US President Donald Trump’s threat of imposing reciprocal tariffs from April 2.
Acknowledging the need to balance tariffs and US subsidies in crucial areas such as agriculture in any trade deal, Jaishankar said he was confident Indian negotiators were aware of the country’s interests and would finalise the “best possible deal for us”.
Jaishankar, who was participating in a conversation with Asia Society president Kyung-wha Kang, a former foreign minister of South Korea, said Prime Minister Narendra Modi and Trump had a “very open discussion” on trade at their meeting in Washington last month and this led to their decision to conclude a BTA by the fall of 2025.
“That is what is currently under discussion…My colleague, the commerce minister [Piyush Goyal], was in the US last month, and since then, we’ve been working the trade account through virtual means. There’s a very active and intense trade discussion going on at this point of time,” he said.
“I wouldn’t prejudge the outcome. I would wait and see really what happens in terms of our ability to reach an understanding with the US,” he said while responding to a question about balancing tariffs and US subsidies.
“But I don’t believe that a problem should in itself be an insuperable obstacle, because there is a strong business case for a BTA with the US,” he said.
Jaishankar pointed out that Indian and American trade negotiators spent a lot of time trying to finalise a limited trade deal during Trump’s first presidential term. That deal was not pushed with urgency because of the Trump administration’s confidence about returning for a second consecutive term, and this was followed by the disruption caused by the Covid-19 pandemic. “So, a trade agreement with the US is actually conceptually not new. What is new is possibly the scale and maybe the urgency with which we are doing it now,” he said.
Jaishankar also highlighted what he described as the greater openness of the Trump administration to engage with India in crucial areas such as defence, energy and emerging technologies. Modi’s discussions with Trump in February led to an assessment by the Indian side about “many changes which suited us or which in some ways form the convergence on which we could build upon”, he said.
In the field of defence, Trump was “much more open and much more active in terms of building a security-defence partnership and much more forthcoming about American technology possibilities”. Even in his first term, Trump personally stepped in and ensured that India could acquire military platforms it was interested in but “were meandering their way somewhere through American bureaucracy”, he said.
“This time around, we suddenly heard a recognition that there has to be a better way of engaging partners. If there are countries who respect and recognise the value of American technology and want to acquire it, there should be easier pathways than the current path. We certainly expect a more substantial, higher quality defence relationship as a result,” Jaishankar said.
In the field of energy, where India wants a stable, reasonable and predictable environment for its long-term growth, Trump “clearly had an interest in ensuring that energy availability was more, energy flows were more diverse, that countries like India could have more choice than we currently do”, he said.
India began importing LNG from the US a decade ago, though this business stayed at a certain level for various reasons. “We have interest in increasing it because the US is a very stable supplier. We found, from the energy perspective, a very positive administration,” Jaishankar said.
The two sides also had a good discussion on critical technologies. “I think big tech recognises the importance of mobility and talent flows and the importance of partnerships, because obviously everything in the tech world can’t happen in America,” he said.
Both sides have greater “understanding and sensitivity” on crucial issues in tech such as creating reliable supply chains, and trusted and transparent partners, he added.
Jaishankar, however, acknowledged that the policies of the Trump administration are leading to a churn and paradigm shift in geopolitics as the US, which underwrote global rules and practices for the past 80 years, has started changing its terms of dealing with the world.
“I think the world will never be the same again. There is something very deep, very profound, very consequential which is happening right now,” he said. The world order is looking at tariff wars and much stronger export controls and the shift means some parts of Asia may be unable to profit economically as they have done in the past, he said in an apparent reference to China.
Jaishankar also said that the past policies of the US were responsible for India not buying more American defence hardware and instead turning to the Soviet Union and Russia. “India was importing defence equipment from the US till 1965. It was the US which cut off India in 1965. It was the US thereafter which did not resume sale of defence equipment to India from 1965 till 2006, barring one exception,” he said.
“If India turned to the Soviet Union and thereafter to Russia, to a large extent, it was a situation also created by the US, which consciously had a policy of not supplying military equipment to India.”