India's 'Red Lines' Have to Be Respected: EAM Jaishankar on Trade Deal with US

Any trade deal between India and the US has to respect New Delhi's "red lines" and efforts are underway to reach an understanding, External Affairs Minister S Jaishankar said on Sunday against the backdrop of a downturn in bilateral ties over Washington's policy on tariffs.

In an interactive session at an event, Jaishankar acknowledged that there were "issues" between India and the US and many of them were linked to the inability to firm up the proposed trade deal, even as he noted that "there are things you can negotiate and there are things you can't".

The external affairs minister said both sides have not arrived at a "landing ground" on trade discussions and that an understanding was necessary as the US is the world's largest market. But at the same time, he said India's red lines should be respected.

The ties between New Delhi and Washington have been reeling under severe stress after US President Donald Trump doubled tariffs on Indian goods in August to a whopping 50 per cent, including a 25 per cent additional duty for India's purchase of Russian crude oil.

India had described the US action as "unfair, unjustified and unreasonable".

However, a phone conversation between Prime Minister Narendra Modi and Trump last month resulted in efforts by the two sides to work on a proposed trade deal.

"We have today issues with the United States. A big part of it is the fact that we have not arrived at a landing ground for our trade discussions, and the inability so far to reach there has led to a certain tariff being levied on India," Jaishankar said at the discussion on the theme 'Shaping Foreign Policy in Turbulent Times' at the Kautilya Economic Enclave.

"In addition, there is a second tariff which we have publicly said we regard as very unfair, which has picked on us for sourcing energy from Russia when there are other countries that have done so, including countries that right now have a far more antagonistic relationship with Russia than we do," he said.

Jaishankar made the remarks while responding to questions on the current state of India-US relations.

"Whatever happens at the end of the day, there has got to be a trade understanding with the US... because it is the world's largest market but also because much of the world has reached those understandings," he said.

"But it has to be an understanding where our bottom lines, our red lines are respected. In any agreement, there are things you can negotiate and there are things you can't," he said.

Jaishankar said India is clear about its approach.

"I think we are pretty clear about that. We have to find that landing ground, and that's been the conversation which has been going on since March," he said.

The external affairs minister also suggested that the strain in the relations has not been impacting every dimension of the engagement. "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 added, "I would really hesitate to read very much more into it than the issues themselves. I think I also want to say a large part of the relationship is actually continuing either as business as usual or, in fact, in some cases even doing more than it was doing before." India and the US have recently resumed negotiations for the proposed trade deal after a brief hiatus of a few weeks.

In the last few months, India and the US held several rounds of negotiations for a bilateral trade deal, but it could not be sealed in view of sharp divergences in certain critical areas, including agriculture and dairy.

In the remarks, Jaishankar also delved into the overall geopolitical situation and said the world is going through an "extraordinary and intense period of change".

"Now, the strategic consequences of this are quite obvious. We have seen a weakening, sometimes even discarding, of international regimes and rules." "We have seen, economically, that cost may not any longer be the definitive criteria, or that ownership or security or reliability, resilience is equally important," he said.

The external affairs minister also cited the "competition" for rare earths and critical minerals, saying it has become a very "major factor".

"This is today actually setting into motion a paradoxical situation where, on the one hand, the very factors which I referred to encourage higher risk-taking. At the same time, because of the consequence of this, there is a serious effort also to de-risk every facet of both politics and economics," he said.

In an apparent reference to China, Jaishankar also talked about the possible consequences of shifting one-third of global manufacturing to one country.

In this context, he flagged concerns over concentration, narrowness and fragility of supply chains.

"We have seen politically that alliances and understandings are being revisited. We've also seen in a few cases, in the cases of really the major polities, that their belief in the balance of power is probably much less," he said.

"When it comes to finance, what we have seen in the last few years is a completely different level of application of sanctions. We have even seen the seizure of sovereign assets," he said.

In the ongoing situation, Jaishankar said, it will not be enough for India to only defend what it has but the nation has to go beyond and continue with its rise.

"For us, just defending what we have is simply not good enough. This has caught us at a time where we had to not only internalise and absorb these risks, but find a way of going beyond and continuing with our rise," he said.

Touching upon various conflicts, Jaishankar said the nature of warfare is changing rapidly.

The Azerbaijan-Armenia, Ukraine-Russia and Israel-Iran conflicts have shown that contactless war is possible with stand-off weapons and can have a decisive outcome, he said.