New Delhi – In a significant statement on the future of Indo-US economic ties, External Affairs Minister S. Jaishankar has affirmed that long-standing tariff disputes with the United States “need to be resolved,” assuring that New Delhi is “actively working on them.” The remarks, made at a prominent industry event, signal a renewed push from the Indian government to smooth over one of the few persistent irritants in an otherwise flourishing strategic partnership.
Dr. Jaishankar’s comments are a strategic acknowledgement that for the bilateral relationship to achieve its full potential, the economic engine must run without the friction of trade disputes.
The Core of the India-US Trade Dispute
For years, the vast potential of the India-US trade relationship has been punctuated by friction over market access and tariffs. The core of the issue dates back to the Trump administration’s 2019 decision to terminate India’s benefits under the Generalized System of Preferences (GSP) program. This program had allowed billions of dollars’ worth of Indian goods to enter the US market duty-free.
The U.S. argued that India had not provided equitable and reasonable access to its own markets. In a retaliatory move, India imposed tariffs on 28 American products, including high-value agricultural goods like almonds, walnuts, and apples. While these disputes represent a small fraction of the over $190 billion in annual bilateral trade, they have an outsized impact on business sentiment.
Why Resolving Tariff Issues is Crucial Now
Jaishankar’s statement is particularly noteworthy given the current geopolitical climate. The global push for supply chain diversification away from China, often termed “friend-shoring,” places India in a uniquely advantageous position. The United States sees India as a critical partner in building resilient supply chains for everything from semiconductors to pharmaceuticals.
For this strategic realignment to translate into tangible economic gains, resolving these underlying trade frictions is no longer just desirable—it is essential.
What a Potential Resolution Looks Like
The EAM’s assurance of “actively working on them” suggests that behind-the-scenes negotiations are gaining momentum. A potential breakthrough could take the form of a ‘mini-trade deal’ or a phased agreement. This might involve:
- India offering better market access for certain US farm products and medical devices.
- The US potentially restoring GSP benefits for India.
- The removal of certain US steel and aluminium tariffs.
A resolution would be a win-win. For American farmers, it would reopen a massive Indian market. For Indian manufacturers in sectors like engineering, leather, and textiles, it would restore a crucial competitive advantage in the US. More broadly, it would send a powerful message that the world’s two largest democracies are deeply integrated economic partners.
While the path is complex, Dr. Jaishankar’s public declaration sets a positive and determined tone, underscoring the view that in the grand theatre of global geopolitics, allowing minor trade disagreements to fester is a strategic liability.
