External Affairs Minister S Jaishankar
| Photo Credit:
ANI
In a move that perhaps marks a shift in the way India is approaching trade talks with the US, the External Affairs Minister S Jaishankar has firmly refuted the US’ claim, made repeatedly in recent weeks, that India has agreed to nil tariffs on US imports. Jaishankar’s statement last week tersely and firmly clarifies that trade talks are in progress, and ‘nothing is decided until everything is decided’. India has cleared the air, and it was high time that it did so. It coincides with the upcoming trade talks between the two countries this week; Commerce and Industries Minister Piyush Goyal is in the US with his team of negotiators.
Since April 8, when President Trump slapped his reciprocal tariffs on 57 countries with a 90-day deadline for them to take effect, his administration has gone overboard in ramping up the pressure on India. The gambit here is crudely simple — to force India to ink a deal in these 90 days, before July 8, in order to escape the 26 per cent tariffs that are expected to kick in after that. The same trick is being played out with the rest of the world as well, forcing quite a few countries to line up for talks with the US. In India’s case, Trump and his colleagues have cynically generated a lot of confusion. India has maintained a studied silence in the face of zero tariff claims. Its reticence was perhaps aimed at ensuring that the talks proceeded in good faith. But US’ actions have marred the process. Trump has proposed a ‘big beautiful Bill’ that may ‘tax’ 5 per cent of $32 billion NRI remittance outflows. India should be circumspect in the face of pressure, without allowing the US to set the pace in the talks. A bad deal cobbled in haste is far worse than none at all.
Meanwhile, India sent out another sharp message that it will look out for its interests. In a throwback to Trump 1.0, India has proposed retaliatory action on US’ tariffs on steel and aluminium. However, it needs to work out a plan with respect to other areas as well. At the outset, it should be clear that the US’ interests in India go beyond trade per se to persuading India to alter its regulatory systems with respect to GM food, e-commerce, big tech, pharma and other high tech sectors. It is also keen on access to India’s food (maize and soyabean) and dairy sector, besides selling defence equipment and oil. India has enough in its toolkit to squeeze a deal that does not hurt its interests. A levy on e-commerce monopolies, a cap on royalty payments, applying data localisation rules and compulsory licensing of patented drugs can be used to ward off an adverse outcome.
There is scope to bring down tariffs in products which are zero-rated with other FTAs. A deal that brings down tariffs on India’s goods to 10 per cent is possible without much sacrifice. But Trump’s bluff and bluster must be called out, whether it is over trade or matters of national security, even as we keep our ties with US on an even keel.
Published on May 18, 2025
