Jaishankar’s remarks arrive amid heightened strain in India–US relations following Washington’s imposition of steep tariffs on Indian exports—including a 50 per cent levy citing New Delhi’s ongoing purchases of Russian oil. The minister said that while both sides are “actively working” to resolve disputes, no “landing ground” has yet been reached for a trade deal.
Underlying tensions predate the current flare-up. In April 2025, India and the US finalised terms of reference for the first phase of a bilateral trade pact, targeting a doubling of trade to $500 billion by 2030. Delhi proposed substantial tariff cuts on over half of its existing import categories from the US. That initiative was meant to smooth the path toward a comprehensive agreement. However, Washington’s punitive measures, and its emphasis on “open markets,” have complicated consensus.
For India, key red lines revolve around safeguarding domestic industries, preserving flexibility in procurement, and protecting policy space on strategic matters such as energy security. Jaishankar cautioned that the United States must recognise that Delhi will not submit to demands that breach those boundaries, even as it maintains its desire to reach a “mutually acceptable understanding.”
In testimony to India’s resolve, Commerce Secretary Sunil Barthwal reiterated that Delhi remains “fully engaged” on a bilateral trade accord, despite delays caused by US tariff actions and concerns over India’s import of Russian oil. In August 2025, President Donald Trump raised tariffs on Indian goods from 25 per cent to 50 per cent, intensifying the pressure on negotiating teams.
On the American side, officials have pressed for deeper access to India’s markets, advocating for broader reductions across import barriers, stronger intellectual property protections, and more open investment regimes. These demands, however, clash with India’s push to retain control over key sectors and shield local firms from abrupt exposure to foreign competition.
Analysts point out that trust between the two sides has weakened. India’s assertion of red lines signals that any future deal will not simply be a return to business-as-usual. While trade continuity continues in less contentious sectors, both sides now must navigate a high-stakes negotiation in which symbolic and strategic prerogatives carry as much weight as economic gains.
Given the scale of disruptions from tariffs and India’s determination to preserve sovereign policy leeway, observers say that reaching an agreement will require creative balancing. India may offer concessions in lower-risk sectors or phased implementation schedules, while securing guarantees that core national interests will remain untouched.