S Jaishankar: India-US Trade Deal Still “Complicated” and Undecided

As India and the United States inch closer to what could be one of the most consequential trade agreements of the decade, External Affairs Minister S Jaishankar on Thursday warned against premature conclusions. Speaking at the opening of Honduras' new embassy in New Delhi, Jaishankar emphasized that the negotiations were ongoing and complicated, stating, “Nothing is decided till everything is decided.” His remarks reflect the cautious approach India is taking as it navigates the evolving dynamics of global trade, especially in the face of Donald Trump’s return to the White House and his aggressive tariff strategy.

Trade between India and the US has always been significant, but recent political developments have added complexity. After regaining power, President Trump reintroduced a series of tariffs, including “reciprocal tariffs” of approximately 27% on Indian goods in April 2025. Although these tariffs were later suspended temporarily—until July 9—they underscore the unpredictable nature of US trade policy under Trump. The 10% baseline tariff on all countries, as well as the 25% levies on steel, aluminium, and auto components, still remain in effect.

In response, India made certain concessions by reducing tariffs on a few American products, including high-end motorcycles and bourbon whiskey. However, unlike other countries that chose to retaliate, India opted for a diplomatic stance. New Delhi made it clear that it does not want to escalate tensions but instead seeks to maintain its status as a reliable and trusted trade partner for the US. This mature approach underlines India’s long-term vision of integrating deeper into global trade networks without becoming entangled in protectionist showdowns.

The core of the current trade negotiations revolves around achieving a mutually beneficial agreement that could boost bilateral trade to over $500 billion by 2030. The scope of the deal is vast, covering at least 24 categories of goods. The United States is particularly interested in expanding exports of agricultural products like soybeans and corn, as well as military equipment. India, on the other hand, is lobbying for preferential tariffs in sectors where it has strong capabilities and employment potential—textiles, toys, leather goods, automotive components, and gems and jewellery.

Significant momentum was observed in April when US Vice President JD Vance visited India and met Prime Minister Narendra Modi. Following the visit, both sides confirmed that the terms of reference had been finalized. Trump subsequently claimed that a deal was imminent and suggested that India might offer the US “forward most-favoured nation” status—a signal of deepening trade ties.

Yet, despite the promising developments, S Jaishankar’s caution on Thursday signals that the road ahead is still uncertain. Trade deals of this magnitude take time, especially when they involve sensitive sectors and domestic political implications on both sides. Trump's impulsive style and public declarations add another layer of complexity, making it difficult to gauge the actual state of progress from his statements alone.

Moreover, these trade negotiations are taking place against a volatile geopolitical backdrop. Just last week, India and Pakistan were on the brink of a full-scale war following the Pahalgam terror attack. Operation Sindoor, launched by India in retaliation, and the subsequent military exchanges pushed the region toward potential escalation. Trump, in his usual self-congratulatory tone, claimed credit for brokering the ceasefire and suggested that trade incentives were a factor in persuading both nations to back down. While India has not officially acknowledged Trump’s role, his comments highlight how trade and geopolitics remain deeply intertwined.

Meanwhile, India has been actively pursuing other trade relationships around the world. In a significant development, New Delhi recently announced a Free Trade Agreement (FTA) with the United Kingdom. This deal promises liberalized market access, particularly in sectors like food processing, automobiles, and beverages. India has agreed to reduce tariffs on 90% of British goods, while Britain will eliminate duties on 99% of Indian exports—an especially big win for India’s textile sector, which employs millions.

Additionally, India signed a $100 billion deal with the European Free Trade Association (EFTA), comprising Iceland, Liechtenstein, Norway, and Switzerland. These agreements reflect India’s multi-alignment strategy in trade policy, ensuring it is not overly reliant on any single country, including the United States.

While hopes remain high for a comprehensive India-US trade deal, the process is far from over. India is making it clear that any agreement must be balanced, strategic, and in the nation’s long-term interest. Until then, officials like S Jaishankar are urging patience and prudence.

In a world increasingly shaped by tariffs, trade wars, and shifting alliances, India’s trade diplomacy remains focused on strategic autonomy, economic growth, and responsible engagement. Whether or not a trade deal with the US materializes soon, India’s broader global trade ambitions are already well underway.