Amid escalating trade tensions triggered by the imposition of 26% reciprocal tariffs on Indian imports by the United States, India has reaffirmed its commitment to pursue a bilateral trade agreement with the U.S. as the preferred strategy to stabilize the economic relationship. Speaking at the News18 Rising Bharat Summit, External Affairs Minister S. Jaishankar emphasized that India remains engaged and optimistic about closing a trade deal with the U.S. despite the current challenges.
The comments come just hours after the new U.S. tariffs took effect, adding pressure on Indian exporters and markets. Indian shares slipped on Wednesday, reflecting broader investor anxiety, even as the Reserve Bank of India (RBI) cut interest rates for the second time this year to cushion the blow from the evolving global economic uncertainty.
More Winning: India Prime Minister Moves To Negotiate A Trade Deal With Trump After New Tariffs
— MAGA Resource (@MAGAResource) April 6, 2025
Instead of whining or slapping on weak counter tariffs like some countries, India’s gunning for a massive trade deal with the U.S. by fall, showing real guts and strategy.
Prime… pic.twitter.com/HcVcNHlMPj
India’s Strategy: Engagement Over Escalation
Addressing the media, Jaishankar said that it was too early to predict the full impact of the tariffs imposed by former U.S. President Donald Trump, but India’s policy response has been proactive and focused on long-term solutions.
“We decided that we will engage the Trump administration early on this set of issues… to negotiate a bilateral trade agreement by fall of this year,” Jaishankar said.
He added that the goal-oriented approach reflects India’s strategy of navigating the shifting global trade landscape through constructive dialogue, not confrontation.
Trade Talks Already in Motion
During Prime Minister Narendra Modi’s visit to Washington in February, both leaders agreed to fast-track the trade deal by the fall of 2025. Since then, momentum has been building. A delegation led by U.S. Assistant Trade Representative Brendan Lynch visited New Delhi last month to refine the negotiation framework.
Jaishankar noted that India is the only country so far that has reached an “understanding in principle” with the Trump administration for such a trade agreement.
“Both sides have been very open, very constructive. This is not something that was forced upon us. We’ve wanted this deal since Trump’s first term,” he said.
A Broader Perspective on Trade and Tariffs
Jaishankar sought to frame the recent tariff issue within a broader international context, pointing out that every country is facing trade friction with the U.S. under Trump’s current tariff regime.
“Every country is tariffed. So today, every nation is crafting its own strategy for dealing with the U.S. In our case, that strategy is to work toward a bilateral agreement,” he said.
Rather than viewing the situation as a reaction to Trump’s policies, Jaishankar stressed that India’s efforts should be seen as part of a long-standing objective—to secure better market access in Western economies and reduce trade imbalances.
Shifting Focus from East to West
India’s trade partnerships over the past 30 years have largely focused on Asian economies such as ASEAN countries, Japan, and South Korea. However, Jaishankar believes that the natural growth potential now lies to the west—in the U.S., Europe, West Asia, and Latin America.
“We need to focus on countries that offer long-term export potential. Our priorities should be shaped by our interests—not just by external pressures,” he said.
He highlighted that past free trade agreements (FTAs) with eastern economies often led to trade deficits, while Western markets represent a strategic opportunity for Indian exporters.
Speeding Up Trade Negotiations
Jaishankar also raised questions about the lengthy duration of trade negotiations, noting that discussions with the European Union have dragged on for decades, while talks with the U.S. have seen more progress in the past six weeks than those with the EU in two years.
“If I were doing a negotiation, I’d be at it till I got the job done,” he remarked. “Why should it take decades?”
India has also been responsive to Europe’s growing desire to finalize an FTA. A goal to conclude the India-EU trade agreement by the end of 2025 has been set by Prime Minister Modi and European Commission President Ursula von der Leyen.
On Biden and the Indo-Pacific Economic Framework
Jaishankar candidly acknowledged that the Joe Biden administration had taken a less enthusiastic approach to bilateral trade deals, focusing instead on multilateral frameworks such as the Indo-Pacific Economic Framework for Prosperity (IPEF).
While India remains part of the IPEF dialogue, Jaishankar underlined that bilateral agreements offer greater clarity and commitment. For India, working one-on-one with major trade partners is not only effective—it aligns with the country’s long-term economic goals and geopolitical positioning.
No Politicization—Focus on National Interest
Jaishankar cautioned against framing every development as a reaction to U.S. politics or policies, especially with Donald Trump’s return to the spotlight.
“Let’s not attribute everything to what Trump does or doesn’t do. Our decisions are based on Indian interests and realities,” he said.
The minister highlighted that India is not merely responding to external moves but shaping its own trade destiny—through engagement, innovation, and strategic partnerships.
Outlook: A Stronger India-U.S. Trade Partnership?
Despite short-term uncertainties, the commitment shown by both New Delhi and Washington indicates a strong appetite for a comprehensive trade deal that could transform the economic relationship between the two democracies.
The next few months are expected to be crucial. With negotiations already underway and a political consensus in both countries for deeper economic ties, the bilateral deal could serve as a model for how large, diverse economies can navigate protectionism, strategic competition, and global economic shifts together.
Conclusion: Tariffs Are Temporary, Strategy Is Long-Term
While the reciprocal tariffs may create momentary disruptions, India’s strategy is rooted in long-term goals. By remaining focused on constructive engagement, India aims to build lasting trade relationships that can withstand political shifts and economic cycles.
As Jaishankar said, the ultimate aim is not just to respond to external pressure, but to expand India’s global trade footprint—with the U.S. being a key pillar of that vision.
