India-US Trade Deal: What’s Holding It Back From Being Finalised?

追加: 2026-06-05

[00:00:10]Hello and welcome. This is the big question this evening. We track a deal that is well almost there and yet not quite after months of tough negotiations. The India US trade deal said to be in that final lap and US officials have been talking about the last mile. While Indian negotiators they've been pushing hard and yet and yet hanging over these talks is that familiar pressure tactic that proposed 12% tariff under section 301 which is linked to forced labor concerns. It's a reminder a reminder that even as the deal nears completion the bargaining is not over. So these are indeed tough trade talks that we are talking about and that's the reality of it. So what will it take to push this deal past the finish line? And more importantly, what does this moment tell us about India's larger trade strategy? Because this is not happening in isolation. Over the last 3 years, India has moved aggressively. We've been signing negotiating deals with the UK, the European Union, Oman, EU, EFA, the European Free Trade Association, also New Zealand. All of these have been done. Now India is shifting from a passive player that it used to be to an active dealmaker. Now the focus is sharper. Market access for Indian goods is one part of it. Services also talent moving them deeper integration into global supply chains. And then there is the other facet of energy security which is a big one. Critical minerals rare earth partnerships all of these and very importantly positioning India as a strong manufacturing alternative to China. But yes, alongside ambition, there are the red lines. India has been very clear about them. No compromise on agriculture, no opening up of sensitive dairy sector and complete flexibility when it comes to energy sourcing whether it's Russian crude or whether it is that diversification whether it's towards the United States and Venezuela. Remember the Venezuelan president is on a trip to India. This is strategic autonomy right now. what we are seeing from the Indian side and its trade policy. We are seeing strategic autonomy. We're engaging everyone. We're aligning with no one completely. And yet the world around India is becoming so much more volatile.

[00:02:22]Tariff wars, Iran conflict, supply chain shocks, sanctions, politics, all of that is in play. Which is why the big question tonight, it goes beyond the last mile debate on the India US deal.

[00:02:33]That's broadly it. Can India's strategy of strategic autonomy which is about balancing trade deals and geopolitical pressures and economic priorities can all of that actually deliver results in a world that is forcing sharper choices for India and yes wherever there are trade deals happening or of course is the real test now in being able to crack the deal and make the compromises and step back a little to get things moving because we live in such volatile times.

[00:03:02]So even as we talk about the India US deal and the possibility of uh that 1% gap being crossed that's something that Sergio Gore the the American ambassador to India was talking about only 1% remains that gap how much of uh that is going to get covered now how quickly can India move how many compromises need to be made let's take that all across to the panel that's joining us on the show tonight well on the show we have tonight joining us Mr. Shashank who's the former foreign secretary to the government of India. Along with him former ambassador and seasoned foreign policy expert KP Fabian is with us. The gentlemen are joined by Kirit Perik. He is noted energy expert, a former member of the planning commission and professor Arida Mukharji also with us from the Indian council for research on international economic relations and she tracks Indian trade policy very closely as well. So thank you all for making the time for the big question. Mr. Shashank, if I can begin with you. We were told by Sergio Gore, the American ambassador to India, that the India US trade deal is 99% done and this happened on the same day that Washington is proposing a 12% tariff under section 301 on India among 60 other countries. But what do you think of this? What is it going to take for India and the US to now cross that last mile and close on the first branch of the deal?

[00:04:24]I think we should be able to close the deal. If we say that all right the applicable duty structure should be on the basis of the bilateral talks and we understand the American situation where the Supreme Court had ruled out all the earlier unilateral tariffs which are imposed by the Trump administration. So therefore they had to go this 301 route and they did that very very fast because by I think 24th July the uh last unilateral tariffs would go. So they would then be putting the tariffs on the basis of the uh the examination done by the trade representative. I however this last 1% is proving to be somewhat difficult for us because there are two things. One is the uncertainty.

[00:05:12]What will happen to it? When will it be imposed? Will it be reduced to 10% as has been suggested for several other countries? And secondly, would our competitive countries get a better deal than us while we are considered as a strategic partner? But then we are constantly suffering from these uncertainties of uh tariffs and the unilateral uh decisions taken by the Trump administration.

[00:05:38]>> Yes. So these are uh the difficulties right now and being able to cross the last mile. But Mr. Fabian, many said that the timing of the 12% tariff threat is striking announced during the final leg of the negotiation. So what do you say about the way in which the American side is negotiating and how is India handling that pressure? Is there a shift on the Indian side in strategy?

[00:06:00]>> Good afternoon to you.

[00:06:03]First of all, we should recognize that uh the 301 thing affects 86 countries.

[00:06:15]>> Yes.

[00:06:15]>> Not uh 60 countries as mentioned by the United States because they mention EU as one country and as you know there are 27 countries there.

[00:06:26]>> Yes.

[00:06:26]>> So that is point number one. Point number two is that we cannot say that this particular announcement is particularly directed against India because let us look at the big picture.

[00:06:39]the recent tariffs announced by President Trump under some other rule after the Supreme Court uh you know declared invalid what he had done earlier under the so-called EA that those tariffs are to expire by the 24th of July.

[00:06:58]So he wants something you know to be ready before that. So they are starting the public hearings on the 27th of July.

[00:07:06]So hopefully they they in in their mind uh this these tariffs will be applicable by the 24th of July and as I said these apply to 86 countries nothing specifically directed against India but larger question >> and that is the United States has been using rather coercive diplomacy when it comes to trade deal and Ambassador Gore's statement that only 1% is left I'm Sorry, I do not understand because this is not a quantitative matter. You know, when we do the drafting, you know, it may be only four sentences, but that could be the most vital in a document which is 10 pages.

[00:07:49]>> So, this 1% and all that is lose talk.

[00:07:51]You know what I mean? And uh what I'm afraid is that America has been putting us putting pressure on us and we the question is I could be wrong but the question is whether we have shown that we are not going to win.

[00:08:07]>> So we are not backing off that is definitely this last 1% >> we have given that message very good.

[00:08:13]I'm not sure that we have given that message strongly enough. You think India needs to send across that message much more strongly and that 1% can be the crucial one and a lot of the bits that are going to be very sensitive and very critical to the deal that might be the last 1%. Mr. Shashank given your experience what usually blocks that last 1% of deals of this nature that India may have struck in the past from all that experience can you tell us is it about market access is it about agriculture any kind of uh strategic concessions what would it be >> if you look at the multilateral process there the system is very clear because all the countries continue working towards the best deed in accordance with the rules and regulations of those organizations and Then in the last moment what they do they switch off the clock and continue the dialogue even if it is well past the midnight hour and all that and then they say okay the final deal has been reached because everybody wants to go home with something positive and therefore then they say okay before the end of the day we have been able to finalize it. But this is not the case here. I think here what we have to keep in mind is that the US is uh getting into this trouble with Iran. They do not know. They keep saying that yes uh we are reaching a deal with Iran. They don't reach a deal with Iran.

[00:09:35]Uh the stock market keeps up and down in the meantime. And the same thing is going to happen with us also. So we don't want those uncertainties to affect us because here in case of India, it will question of the workers the their employers and and the whole process of sending goods out to to USA which is an important market for us. But that does not mean that you know that we as a negotiators they bring into all these uncertainties into our own production and uh export process.

[00:10:06]>> Very true. I mean uh since all of this is in play I wanted to ask professor Mukharji as well when you're talking about India drawing those clear red lines and there is no compromise on agriculture and dairy but in this kind of deal with the US how sustainable do you think is the Indian position if Washington is insisting on market access over there? Has the Indian position you think hardened? We are holding firm but do you see the strategy to hold ground on what is important for us something that India can build on?

[00:10:34]>> India's position with the US depends upon its other key FTAs and where we stand. You have seen that India went to sign and US was keen to sign after the U deal. So we have to wait for June for the EU deal to be ratified in the parliament. UK is in a bit of a political dandrum at their country level. So there is a problem there. We need to see how that deal is being implemented. Now you also the India US deal is a lot dependent upon how US is able to maneuver its own domestic policies court judgments etc. Now if you look at this we don't need to panic at all because US if it doesn't get its course judgment true it will be zero tariff it is putting tariff it is putting tariff on every trade partner irrespective of whether they have a trade agreement or not. So there is no respect for the trade agreement. Now the bigger question that India needs to highlight and the current US move and that is very important because that is also the European Union move is that they are bringing environment and labor standards non-trade issue as a trade negotiable strategy in a trade in goods agreement. My logic is India needs to 1% is not the very big thing about dairy or not dairy and any which way you are not bringing milk from the the America that is a very sensitive issue but a very minor sensitive issue okay >> bigger issue here is that can India crossnegotiate uh and safeguard its IT sector can we stop the higher bill can we really do a digital agreement can we get a moratorium from the Americans So you know it will be a defense it will be a goods it is a much broader deal and that is where the smart negotiation.

[00:12:29]Professor, professor if I may interject this time India is pushing for services, for digital trade, for talent mobility and these are areas where the earlier FDAs that we've done, they have underperformed. So is this where the real gains lie? Like you're saying again is that the strategy shift that you seeing from the Indian side when it comes to our trade policy >> earlier FDA's underperformed according to some expert only by looking at the trade in goods data not considering that inputs can be also used in manufacturing as a negative trade balance but we haven't got we need to have a more secure digital trade flows because in the WTO the working uh committ is no longer there. We could not get a moratorum which we planned to get around with Brazil not have making it happen and Americans and others you and others have gone and signed it. So there are areas where it and other sectors can be taxed can be under a employment issue because the US is also touching green card US is also touching visa. So the negotiations now now that the negotiations will happen and now that the tariffs are not a real problem for India alone, India needs to calmly sit and negotiate as well as carrot and stick offer the large market and bring in the you know good part of it and there is no rush to negotiate >> but energy is very central to trade strategy and Mr. Para do come in because India's crude imports have shown a mix.

[00:14:08]Russia is still dominant but there are sharp spikes in US and Venezuelan oil.

[00:14:13]So is that diversification by design from the Indian side or do you think it is uh brought upon by necessity?

[00:14:20]No, I think uh our imports we are dependent on large amount of crude oil imports. Actually 55 85% of our petroleum product consumption is based on imported crude and I think it is in our interest to diversify sources as much as possible. We have seen that you cannot rely too much on on stability in the US actions on these things and therefore I think it's even more imperative for us to diversify this. At the same time I think uh we should recognize that just as US trade is important for India, Indian trade is also important from the United States.

[00:15:04]>> Very true. So, so I think we should really not uh give any undue concessions. I think certainly if you put tariff on everyone that's fine because then our comparative position our competitive position is not affected.

[00:15:22]>> True. So I think if it is the same tariff and all but I think bringing these ideas like exploited workers is really very arbitrary.

[00:15:35]>> How do you know the workers are forced here and not forced in this industry? So I think we should not agree to such a statement that it is because of the exploitation of worker compulsory working force requirement of working.

[00:15:50]Yes. That is causing us this because Mr. Par about the balancing act that India needs to do between sanctioned Russian oil and US expectations of where we should get our oil from. Do you think that complicates trade negotiations for us?

[00:16:05]>> Yes, of course it complicates and that is always the question. But I think at the same time I think uh uh US can provide us that we should insist that if you want to provide so much of oil to us you must match the price at which others are providing us and so as long as as as long as US give us energy at competitive prices it doesn't really matter where we import from >> right >> but certainly I think we should insist on having a competitive price and we should in insist on the same treatment as given to all traders.

[00:16:43]>> Correct. Mr. Shashanka, I want to step back and look at some of those points raised by professor Mukharji as well.

[00:16:49]The broader strategy India has adopted in negotiating FTAs with UK, with European Union, Oman, Efta, New Zealand.

[00:16:57]Do you see a common thread over there?

[00:16:58]Is this about derisking dependence on any single market or do you think it's more than that? What do you see as different in India's trade policy approach now?

[00:17:09]>> Well, we had been negotiating with the European Union for a very long time and the UK for a long time, but somehow these things fell in place because they came under pressure from their NATO partner, United States.

[00:17:21]>> Yes.

[00:17:22]>> And therefore those were looking for alternative uh sources of support. So, India was able to uh bridge that gap at that time.

[00:17:32]But the point is that the US has imposed lot of restrictions on China's imports.

[00:17:38]So Chinese are entering the other markets very aggressively and so we have to keep that also in mind that it is not just the FTA that we are signing with many of these countries for our products but there are other countries which are also going to enter that market very aggressively.

[00:17:54]>> Yes. And therefore we have to keep in mind that the US market which has been with us and we get about 20% of our exports uh go to USA. So we should not lose that market in any case and right now seems to be a good time and the US attention is diverted more towards Iran and they have been talking about a better relationship with India. Of course, I agree totally with professor Parik that we should not give any concessions which are against the interests of the Indian people especially like we have been talked about the agriculture and dairy sectors.

[00:18:29]uh but then other cases uh on energy we should just make sure that uh if we are getting them from Russia and others they should be available to us because we do not know I mean we must have availability of uh sources of supply from all over the place and therefore America which has been giving the temporary respite for purchase of Russian oil or other oil available on the high seas they should continue to do that till they reach the final deal with Iran. I think that is an important thing we should also bring to the notice of the trade negotiators from the United States.

[00:19:02]>> Do you think that's a crucial one as well? Until a deal is done with Iran, perhaps we should not be signing on the dotted line. I don't know if you agree, Professor Mukharji, but even when you compare what's happening right now to the past when you had FDAs with ASEAN, with Japan, Korea, which led to rising imports and then deficits what is fundamentally different this time? Are we finally getting the balance right when it comes to goods, services, investment and mobility?

[00:19:29]>> When you are a high tariff country, it is the best thing to do is to unilaterally liberalize tariff and use the FDAs as a tool to reduce the non-tariff barrier. FTA cannot be a tool between a country with a high tariff and a low tariff to negotiate. We are always in a different level playing field.

[00:19:50]Having said that, previously see FTAs are changing now investment is not a part of FTA with either the UK or European Union and personally I feel without investment you trade does not deliver. Secondly, even if we have a negative trade balance, there has been certain good parts of the FDA. If you look at the Singapore FDA and the amount of investment we got from the Singapore after the FDA, that's a very good thing.

[00:20:17]We don't look at the positive side. We always look at the trade balance going down. It will go down because though they are zero tariff country, low tariff countries, they have less to lose in the trade in goods. We have to open up our market. So that's why you have to look at a uh how do you fit it? One very important part of it is geostrategic.

[00:20:38]You have to be there. Secondly is that if I am giving something to Korea, Japan, Ashan, but if I'm giving less and they are getting giving more to China and getting more from China, China will be more integrated into their market. So therefore it FDAs are always give and take. It is not about the number that you do. It is about the quality of each of your FTAs and their abilities to deliver non-tariff measures. you know seen if you get regulatory compliances, if you get crossber paperless trade, uh if you put in systems in place, of course, the benefits will be a lot more.

[00:21:20]>> Definitely and very importantly, Professor Mukharji, you said that India needs to be there when it comes to global supply chains. We need to make it very clear how exactly we are bringing in the competitiveness, especially when compared to China. But to be there, Mr. very importantly it is very critical that we get our rare earths our critical minerals our supply chains >> and get those right and so those have to be central in the negotiations especially with the US and the quad partners where do we stand >> I think it is really what you make it's very important >> that FTA is one thing but competitiveness of our industries our our manufacturing our services sector is very very critical because unless If you are competitive even though you have markets are open you are not able to sell anything. So I I I I think it is not just a onetrack thing. You need to look at the whole issue in a comprehensive manner. And I do believe however that India can really make the necessary changes in it in its regulations and so on so that our industry domestic manufacturer can be more competitive at the international level. And uh uh and I think uh what is critical here is that uh we have to understand why even Indians are not invol investing in India. They're all investing abroad.

[00:22:50]Yes.

[00:22:51]>> So it is not it is not the lack of investable resources or surplus. It is essentially a a a you know attractiveness of investing in India >> which is very important. And if we don't do it ourselves, then how are we going to tell the world to do it?

[00:23:09]>> Absolutely. And it is not and without that no matter how favorable your FDA are, it will not you will not be able to export more.

[00:23:18]>> Right. So you could have a favorable FDA, but you will not be able to export more if you don't have the competitiveness in place. But Mr. Shashank, when we talk about this term strategic autonomy, it means engaging all sides. But in a world where you're seeing these sharper rivalries, especially USChina tensions, you think India can keep balancing indefinitely.

[00:23:40]>> No, no. When we talk of strategic autonomy, it does not really mean that uh we are isolating ourselves completely from everyone else. It really means that we are representing the global south. We are very very friendly with them.

[00:23:55]we want their interests to be fully taken into account in the global negotiations and at the same time we are having this multi-alignment.

[00:24:02]Uh so strategic autonomy and multi-alignment perhaps should be understood in that context because they are come from a background of our partnership and strong relationship with the other developing countries. I think therefore we should need to continue on that. We are the chairman of the bricks and we would be having the brick summit in our country and we just cannot move away from those responsibilities we have undertaken in our negotiation with those countries. So our negotiation with United States right now should keep in mind that we have a positive outlook but without uh controlling our uh negotiations with the other broader global south and the bricks member countries and partner countries.

[00:24:47]>> Okay. Mr. Fabian, we're aiming to take India US trade to $500 billion. You think that's realistic in the current global environment or you think that's overly ambitious?

[00:24:57]I think it is unrealistic and uh the fact of the matter is that we had put too many eggs into the US basket and thank god we have started transferring some of the eggs into other baskets right >> but uh let us understand the fundamental problem the fundamental problem is that a United President Trump doesn't believe that international trade if conducted according to the uh rules of WTO is in the interest of the United States.

[00:25:31]B. He believes America first and America wants what it wants and it will get it by coercive diplomacy. I repeat, by coy diplomacy. Now let me recall that this 1974 you know the 30 301 it language is it is to be applied against countries engaging in court unjustifiable unreasonable or discriminatory trade practices. Now these words you know those three adjectives are very can be interpreted in so many ways. So we have a real problem and I agree with the other distinguished speakers that we should not panic because panic doesn't is not a policy >> but but Mr. Fabian since I'm running out of time I just want to know Mr. Fabian if I may interject one line because I'm closing the show. Can India secure growth, energy security and strategic autonomy simultaneously or do you think trade-offs are inevitable? In one line sir, >> well some trade-off may be inevitable but fundamentally India should make it clear to the United States India will you know will not budge on essential matters. I don't think we India has made it clear so far.

[00:26:51]You think India needs to make it clear that we are not going to budge? Perhaps that's why we don't have a deal just yet. That deal may be inches away.

[00:26:58]Today's conversation here. The real story is not just about closing one agreement. It's about how India is reccalibrating its place in a fractured world. So strategic autonomy is no longer a slogan. It's actually a stress test. And the choices that India is making now is going to define whether we can convert global turbulence into long-term advantage. I want to thank my guests for such great insights. Mr. Shashank, Mr. Fabian, Kirit Parik, Arvida Mukharji, thank you for joining us on the big question. The key question right now, we're trying to build alliances and yes, it is a fractured world. India, US trade ties right now in question. Yes, 301 is a bit of a speed bump. How can we cross that last mile?

[00:27:35]How can we hold our ground? It's a story that is still developing. I'm Vicramos on the big question. Good evening.