India insists US trade deal must respect 'red lines'

India's External Affairs Minister S. Jaishankar drew firm boundaries in trade negotiations with the United States on Sunday, declaring that any bilateral agreement must respect New Delhi's "red lines" as both nations struggle to resolve escalating tariff disputes that have pushed duties on Indian goods to 50%.

Speaking at the Kautilya Economic Conclave in New Delhi, Jaishankar acknowledged the strain in India-US relations but emphasized that negotiations will continue only on India's terms. "Whatever happens at the end of the day, there has got to be a trade understanding with the United States," he said. "But it has to be an understanding where our bottom lines, our red lines are respected."

Tariff Tensions Escalate Amid Stalled Talks

The comments come as India faces the steepest US tariffs imposed on any trading partner, with President Donald Trump doubling duties to 50% in August—25% in reciprocal tariffs and an additional 25% penalty for India's continued purchases of Russian oil. Jaishankar called these levies "unfair" and "unjustified," particularly the Russia-related penalties

"There is a second tariff which has picked on us for sourcing energy from Russia when there are other countries that have done so, including countries that right now have a far more antagonistic relationship with Russia than we do," Jaishankar said

The tariffs threaten $60.2 billion worth of Indian exports, representing 55% of the country's merchandise shipments to its largest trading partner. Sectors including textiles, seafood, gems and jewelry face severe disruption, with economists projecting a 0.4-0.5% reduction in GDP growth.

Agriculture Access Remains Key Sticking Point

Central to the deadlock are US demands for greater access to India's agriculture and dairy markets, which New Delhi has refused to provide. Prime Minister Narendra Modi has repeatedly vowed to protect farmers, declaring in August that he would "stand like a wall" against policies harming agricultural interests.

US Commerce Secretary Howard Lutnick has taken an increasingly aggressive stance, recently stating that countries like India must "play ball with the President of the United States" and warning that "if you want to sell to the US consumer, you've got to play ball". Lutnick has demanded India "open their markets" and "stop taking actions that harm America.

However, Jaishankar emphasized that while tensions exist, "a large part of the relationship is actually continuing either as business as usual or in fact in some cases even doing more than it was doing before". Both countries have completed five rounds of negotiations since March, with recent talks in September described as "constructive" and "positive".

The ministers from both sides are working toward completing the first phase of a Bilateral Trade Agreement, originally targeted for completion by October-November 2025, as they seek to expand bilateral trade from $191 billion to $500 billion by 2030.