With the July 9 deadline approaching and the threat of a 26% reciprocal US tariff looming, Prasad backed the government’s position of not rushing into a deal. “We should not be arm-twisted into this trade deal,” she said. “We should not be in a hurry. We should call the bluff and wait and watch.”
Prasad also downplayed the potential impact of higher tariffs, saying India’s economy is largely driven by domestic demand. “India is a domestic market-led economy. It is not a trade-led economy. Trade has been a very small percentage of our GDP all through—less than 2%, perhaps,” she said. While acknowledging that there could be some short-term export losses, she pointed out that US importers of Indian products may create internal pressure within the US to soften their stance.Commenting on the broader context of the negotiations, Prasad said the talks are inherently imbalanced. “We are, at best, a low-middle-income country by per capita income. So, the two economies cannot call themselves equals or claim to be negotiating on a level playing field,” she said, warning that India should remain cautious.
When asked about geopolitical factors like the US role in the Iran-Israel war or its engagement with Pakistan, Prasad said these factors remain in the background but are not shaping the core of the trade talks. “What is out on the table is a pure trade negotiation—which has to be in the national interest and mutual interest of the two,” she added.
India is expected to send officials from the Commerce Ministry to Washington for the next round of in-person discussions. Sources told CNBC-TV18 that talks remain stuck on key issues including access to India’s agriculture and dairy markets, as well as genetically modified products.
