External Affairs Minister S Jaishankar has addressed the factors behind the extended timeline for the India-US bilateral trade agreement, highlighting structural differences, evolving US tariff policies, and complex ground realities.
Speaking at an event hosted by the Asia Society in New York during the 81st session of the UN General Assembly, Jaishankar noted that while negotiations have taken longer than anticipated, both nations have reached a point where “there is more or less an understanding on the trade agreement.”
Key Factors Behind the Delays
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Structural and Per Capita Differences: Jaishankar pointed out that India is a society characterized by small agricultural producers and small factories, contrasting sharply with the economic structure of the United States. This structural variance requires immense patience and meticulous detail during trade talks.
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Shifting US Tariff Landscape: Although a framework for the first phase was finalized in February, subsequent changes in US trade policy—including an additional 10% tariff under Section 301 on Indian imports following an investigation into forced labor—introduced new complexities.
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Navigating the 301 Process: Jaishankar explained that because the US Section 301 process is still unfolding, negotiators face decisions on precisely when to close out an agreement that is otherwise very far advanced.
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Public Opinion and Mobility: The minister also touched on broader socio-political challenges, noting that the economics and politics of cross-border mobility are currently at odds, and that public opinion in the social media era plays a heavy influencing role in democratic bilateral relations.
Key Takeaway: While economic differences and evolving US tariff policies created bumps over the past year, finalizing the advanced trade pact is expected to put India-US relations on a stronger, upward trajectory. Commerce and Industry Minister Piyush Goyal is currently in the US (September 29–October 5) to hold further discussions with US Trade Representative Jamieson Greer.
