India and the U.S. are engaged in active discussions on trade as External Affairs Minister S. Jaishankar discusses the potential for a bilateral trade agreement and ongoing negotiations tied to President Trump’s tariffs. The talks aim to strengthen trade ties amidst concerns about market access and reciprocal tariffs.
On March 27, 2025, Indian External Affairs Minister S. Jaishankar announced that India and the United States are engaged in “very active” and “intense” discussions regarding trade. These discussions come amidst concerns surrounding President Trump’s reciprocal tariffs, set to begin on April 2. Jaishankar underscored the potential benefits of a bilateral trade agreement (BTA), citing a robust business case for such an arrangement between the two nations.
Following a meeting between Prime Minister Narendra Modi and President Trump last month, both nations agreed to initiate negotiations for the BTA by the fall of 2025. “There’s a very active and intense trade discussion going on at this point in time,” remarked Jaishankar, as he participated in a session led by Kyung-wha Kang, CEO of the Asia Society.
Presently, U.S. Assistant Trade Representative Brendan Lynch is visiting India for discussions related to trade. Jaishankar noted that it remains uncertain whether India might receive some form of waiver in light of the forthcoming tariffs. He expressed confidence in the negotiating teams, stating, “I have every confidence that they (negotiators) will negotiate what is the best possible deal for us.”
Responding to concerns regarding India’s agricultural market, Jaishankar highlighted that such challenges should not act as insurmountable barriers, advocating for the prospective BTA with the United States. Furthermore, he reiterated India’s intentions to pursue separate free trade agreements with the European Union and the United Kingdom, which are currently at advanced stages.
Mr. Jaishankar conveyed optimism for developing a “more substantial” defense relationship with the U.S. under the Trump administration and expressed a commitment to strengthening energy ties, emphasizing the need for stability and predictability in energy supply for India’s growth.
Jaishankar noted that India’s energy imports from the U.S. had been limited in the past but expressed interest in enhancing these imports, viewing the U.S. as a reliable energy supplier. He further praised the Trump administration for showing interest in diversifying energy flows and increasing choice for India.
Jaishankar remarked on Trump’s policies, indicating that there are aspects of these policies that align favorably with India’s interests, suggesting a potential for collaboration. While the economic tensions due to U.S. tariffs have raised global trade war concerns, India has been proactive in reducing tariffs for key developed partners and negotiating trade agreements to mitigate these pressures.
The Indian government has also made moves in its 2025-26 budget to lower tariffs on select goods to signal openness to negotiations. Washington is advocating for India to increase imports of American oil, gas, and military equipment to alleviate the substantial $45 billion trade deficit related to India.
The U.S. remains India’s largest trading partner, with bilateral trade in goods and services totaling $190 billion in 2023. Additionally, the U.S. was the third-largest source of foreign direct investment in India for the financial year 2023-24, further underscoring the importance of this relationship.
The discussions between India and the U.S. regarding trade are characterized by ongoing negotiations for a bilateral trade agreement and potential adjustments to existing tariff policies. Jaishankar emphasizes the strong business case for such an agreement and the importance of establishing fruitful partnerships in defense and energy. As both countries navigate these complex trade dynamics, India demonstrates its commitment to fostering relationships with major global partners while also addressing domestic concerns with agricultural market access. The overarching sentiment is one of cautious optimism as both nations strive for mutually beneficial agreements.
Original Source: www.thehindu.com
