Negotiators Draft Text but Political Hurdles and Red Lines Remain
Negotiations for a long-awaited trade agreement between India and the United States appear to be entering a critical phase. Officials indicate that negotiators are now working on the specific language of a potential deal text. However, India's Commerce Minister Piyush Goyal has issued a strong public statement, asserting that India will not be rushed or pressured into any agreement. He emphasized that national interest and long-term implications will guide India's decisions, particularly concerning sensitive issues like its energy relationship with Russia.
Drafting the Deal Technical Progress
According to senior government sources in New Delhi, negotiators from both countries held virtual talks recently and are scheduled for more discussions. Significant progress has reportedly been made, with both sides finding "more or less convergence" on the core elements. Officials describe the current stage as "finalising the language" of the text, suggesting the technical groundwork is nearing completion. There is also a possibility that US negotiators may travel to India for the next round of in-person talks.
However, officials stress that finalising the technical language does not guarantee an immediate deal. A final announcement requires "political convergence" at the highest levels. Key areas still under discussion include non-tariff barriers and agricultural market access. India may be willing to accommodate some US agricultural products, but finding common ground remains delicate. The structure of the agreement itself is also described as unconventional, involving reciprocal tariffs rather than being based on standard World Trade Organization (WTO) most-favoured-nation (MFN) principles.
India's Firm Stance "No Gun to the Head"
While technical talks proceed, Commerce Minister Piyush Goyal delivered a forceful message about India's negotiating stance during a conference in Berlin. "We do not do deals in a hurry, and we do not do deals with deadlines or with a gun to our head," he stated unequivocally. Goyal framed the negotiations not as a short-term transaction but as a long-term strategic decision. He emphasized India's focus on securing national interests for its large, young, and aspirational population.
He elaborated that India views trade agreements through the lens of its future economic trajectory, projecting a $30 trillion economy in the coming decades. "We will negotiate based on the future," Goyal said, indicating that India is prepared to walk away from "sub-optimal deals" made under pressure. He added that if tariffs are imposed, India will find ways to overcome them by strengthening domestic demand and exploring new markets.
Defending National Interest and Foreign Policy Choices
Goyal also directly addressed external pressure on India regarding its relationship with Russia, particularly concerning oil imports. "I do not think India has ever decided who its friends will be based on any other considerations other than national interest," he asserted. He rejected the notion that India's foreign policy choices could be dictated by others.
He pointedly mentioned recent reports of Germany seeking exemptions from US sanctions on oil and suggested the UK had secured similar arrangements. "So then why single out India?" he questioned, directly challenging the differential treatment. His comments come as the US has imposed additional tariffs on India linked to its Russian oil purchases and sanctioned major Russian energy firms. Goyal stressed that trust and relationships are as crucial as tariffs in any long-term trade deal.
Negotiations have been ongoing since March, with five rounds completed. While progress is being made, Goyal's strong statements underscore that a final agreement hinges on political will and respect for India's strategic red lines.
