Supply Chain News Report – 10/06/2025
External Affairs Minister S. Jaishankar said on Sunday that India and the United States are still some distance away from finalizing a trade agreement but stressed that any understanding must take India’s fundamental interests into account. Speaking at the Kautilya Economic Forum in New Delhi, Jaishankar underlined the importance of reaching common ground while making it clear that India’s “red lines” cannot be compromised in the process.
The minister explained that a trade arrangement with the U.S. is not just desirable but necessary, given the size of the American market and the fact that several other countries have already reached their own trade understandings with Washington. “There has got to be a trade understanding with the United States. There has to be one because it is the world’s largest market but also because much of the world has reached those understandings. But it has to be an understanding where our bottom lines, our red lines are respected,” Jaishankar said.
Highlighting the current challenges, Jaishankar noted that U.S. President Donald Trump’s administration has imposed a 50 percent tariff on Indian goods. He acknowledged that this remains a central issue in discussions, calling it a difficult reality that negotiators must work with. “I deal in a world of realities, and my reality right now is at 25 percent and 25 percent of a 50 percent tariff, and that is what we are negotiating,” he said.
The minister emphasized that India is not ignoring the problems, nor is it minimizing them. He pointed out that both countries are well aware of the obstacles but remain committed to finding solutions through dialogue. “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. At the same time, he cautioned against interpreting trade tensions as a signal of deeper trouble in the overall relationship, adding that differences should not overshadow the broader strategic and economic partnership.
Jaishankar further remarked that the nature of trade negotiations always involves clear boundaries on what can be negotiated and what cannot. “In any agreement, there are things you can negotiate and there are things you can’t. And I think we are pretty clear about that, and we have to find that landing ground. That has been the conversation really, which has been going on since March,” he said while responding to questions from the moderator, N. K. Singh.
The issue of tariffs has gained attention after the U.S. Customs and Border Protection announced new reciprocal tariff rates that came into effect on August 27. These measures have added fresh pressure on exporters while intensifying the urgency of trade talks. India, while seeking to protect its domestic industries, is also mindful of the need to maintain smooth access to the U.S. market.
Adding to the ongoing efforts, Commerce and Industry Minister Piyush Goyal recently returned from a high-level trade visit to Washington. The Ministry of Commerce described the discussions as positive, noting that both sides agreed to step up efforts to reach an “early and mutually beneficial conclusion” to the proposed pact. Goyal’s visit was viewed as an important step in laying the groundwork for more concrete progress in the months ahead.
Jaishankar concluded by reiterating that India values its trade partnership with the United States but that any arrangement must strike the right balance between cooperation and national interest. “Whatever happens at the end of the day, there has got to be a trade understanding with the United States. But it has to be an understanding where our bottom lines, our red lines are respected,” he said, restating his firm position on the matter.
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