The sudden breakthrough in the India-US trade negotiations was a result of multiple converging factors, Dhruva Jaishankar, Executive Director of the Observer Research Foundation (ORF) America, has said.
After US President Donald Trump announced the trade deal on Monday, Jaishankar told NDTV, “If we rewind to April last year, we would have said India would have been one of the first countries to get a comprehensive agreement.”
That early momentum, he said, was disrupted by a downturn in bilateral relations following military operations, leading to nearly nine months of frosty engagement.
“Now something has changed,” Jaishankar said, adding that at least two developments likely played a role.
“India was showing it was still open for business,” he said, citing New Delhi's trade agreements with the UK, the European Union and New Zealand. At the same time, economic data suggested that US pressure tactics were not working.
“Indian exports to the US increased by about 26 per cent last quarter over the year before, while US exports only grew by 3 per cent,” he noted.
Asked whether there was a tipping point, Jaishankar said, “We can only speculate.”
He pointed out that even senior US trade officials acknowledged publicly that India was offering one of the best deals available. “In July last year, the two sides actually came very close to an announcement,” he added, saying that the agreement had been technically ready for some time.
Russian oil imports remained one of the main sticking points. Jaishankar said oil markets work globally, and countries often have limited choices. “When there is a global shortage, India has to source oil from where it can,” he said. He added that rising oil production in the US and other countries could help ease pressure in the future.
Jaishankar said India's firm stand on sensitive sectors like agriculture, dairy, and energy was also important. “Every country has red lines in trade negotiations,” he said. “The more trade deals you have, the more leverage you have with others.”
The relationship between Prime Minister Narendra Modi and Trump also played a role, according to Jaishankar. “On the US side, personalities matter to this extent more than in the past,” he said. “Personal engagements do matter. This did require a call from the prime minister. Nobody else could have gotten things over the line.”
“So far, this looks like a framework agreement,” he said. “Only one year into a four-year administration, a lot could change. But I think the more both sides see a value in investing in each other,” he added.
