External Affairs Minister S. Jaishankar spoke candidly about the ongoing trade tensions between India and the United States, emphasizing the importance of protecting India’s core interests. Speaking at the Kautilya Economic Conclave (KEC 2025), Jaishankar attributed the current trade friction, including the 50% tariffs on Indian exports, to the failure of both countries to reach a common understanding or “landing ground.” He underlined that while negotiations continue, India will not compromise on its key “red lines,” signaling a firm stance in ongoing discussions.
The tariffs have emerged as a major point of contention. They include a 50% levy on Indian goods and a 25% tariff linked to Russia crude oil purchases. According to Jaishankar, these measures stem from an inability to align trade priorities and concerns between the two nations. Despite this, he conveyed optimism that the situation would not disrupt all facets of the India-US trade relationship, emphasizing that much of bilateral trade continues under “business as usual” arrangements.
Jaishankar explained that the ongoing talks aim to address these tariffs while ensuring India’s fundamental economic and strategic interests are preserved. The minister highlighted that the current international trade environment has evolved significantly. Traditional rules-based frameworks have weakened or, in some cases, been disregarded, forcing nations to weigh ownership, security, reliability, and resilience alongside cost when making trade decisions.
India’s red lines, as Jaishankar described, relate to its essential economic sovereignty, national security concerns, and the integrity of strategic supply chains. He stressed that any resolution must honor these priorities, warning that concessions that compromise India’s long-term interests would be unacceptable. By taking this firm stance, India aims to negotiate tariffs without ceding critical economic or strategic ground.
The minister also touched on the impact of global geopolitical shifts on trade policy. He noted that supply chain dynamics, strategic partnerships, and geopolitical tensions now play a significant role in trade negotiations. For instance, countries increasingly prefer sourcing materials and goods from reliable and secure partners, rather than focusing solely on cost efficiency. These shifts underscore the complexity of current trade discussions between India and the US, which are influenced by multiple factors beyond tariffs alone.
Jaishankar further highlighted the role of India’s existing Free Trade Agreements (FTAs) in shaping its trade posture. While these agreements with Asian economies have provided certain benefits, they have also created competitive pressures and, in some cases, inadvertently opened pathways for competitors such as China to gain an advantage. He emphasized that future FTAs should prioritize partnerships with non-competitive economies, thereby safeguarding India’s interests and enabling strategic growth in key sectors.
Another point Jaishankar raised was India’s historical underperformance in manufacturing. He noted that India has “lost decades” in this sector, which has impacted the country’s ability to compete globally. The minister called for urgent development of capabilities in both advanced manufacturing technologies and traditional industrial sectors. Strengthening these areas, he argued, is critical for creating a resilient economic structure and reducing dependency on external partners for essential goods.
Investing in manufacturing capabilities also ties directly into India’s negotiation strategy with trade partners. A stronger domestic manufacturing base would allow India to better manage tariffs, diversify exports, and assert greater leverage in discussions with countries like the US. By balancing economic growth with strategic trade management, India aims to maintain sovereignty over its trade policies while remaining a key player in global markets.
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Jaishankar also reiterated the importance of supply chain resilience. In a world where global disruptions—such as geopolitical tensions, economic sanctions, and energy security issues—can significantly affect trade, India must strengthen its own supply chains. This approach would allow the country to withstand external shocks, negotiate more effectively, and ensure that trade decisions are aligned with long-term national priorities.
In conclusion, External Affairs Minister S. Jaishankar’s comments at the Kautilya Economic Conclave signal a firm but pragmatic approach to India-US trade negotiations. While India seeks to resolve the current tariff challenges, it remains unwavering on its core red lines, which include national security, economic sovereignty, and strategic supply chain protection. At the same time, India is focused on strengthening its domestic manufacturing base, reviewing FTAs to protect its interests, and building a resilient economic structure capable of navigating global uncertainties.
The minister’s remarks highlight the evolving nature of international trade, where geopolitical considerations, supply chain reliability, and strategic partnerships are increasingly critical alongside traditional factors like cost. By combining a strong negotiating position with investments in manufacturing and strategic trade planning, India aims to secure favorable outcomes in its ongoing discussions with the US while laying the groundwork for long-term economic resilience and sustainable growth.
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