The bilateral trade announcement between India and the United States, headlined by Washington’s commitment to slash tariffs on Indian merchandise to 18 per cent, has been portrayed in some quarters as a landmark reset in economic ties.
US President Donald Trump, in a much-amplified statement, declared that the reduction from punitive levels imposed last year would invigorate commerce; Indian exporters and industry lobbies have welcomed the shift as a relief after months of tariff pressure.
Yet beneath the glossy numbers lies a striking absence of detail. Neither New Delhi nor Washington has published a comprehensive, textually authenticated treaty. Prime Minister Narendra Modi’s public response on social media acknowledged the tariff reduction and praised deepening cooperation, but conspicuously omitted any reference to the multiple conditions floated by President Trump—including India’s supposed pledge to halt Russian oil imports or the reported $500 billion framework of US purchases.
This silence is consequential. In international trade diplomacy, formal articulations: schedules, annexes, timelines and reciprocity clauses define commitments and enforceability. A press release alone does not constitute a legal obligation. The absence of such documentation raises fundamental questions: Has India agreed to what the US claims? If so, what is the precise scope? And why has the Indian government chosen opacity over clarity in a deal that could reshape its economic sovereignty? The lack of transparency does not inspire confidence in the so-called breakthrough.
Sanctions and energy policy
A core issue underpinning this apparent agreement is the United States’ linkage between trade policy and India’s energy sourcing—particularly its long-standing imports of Russian crude. Washington’s narrative suggests that India’s willingness to “stop buying Russian oil” was a quid pro quo for tariff relief. But here, the public record is strikingly thin on confirmation. Modi’s official statements did not endorse this premise; he neither acknowledged changing the energy policy nor articulated new procurement targets from the US or elsewhere.
If India were to acquiesce to US pressure on energy supply, the economic implications are profound. Russian crude, often priced competitively and suited to Indian refineries, has been a key element of India’s energy mix, helping to contain import bills and inflationary pressures. Hastily pivoting away, especially under external pressure, could exacerbate domestic costs for consumers and industry alike. Yet New Delhi has thus far not publicly confirmed any shift in crude sourcing obligations, leaving analysts to speculate whether such commitments are de facto conditions or manufactured expectations from Washington.
The broader geopolitical context, with the Russia–Ukraine conflict still unfolding and Washington pushing competitive leverage through tariffs and sanctions enforcement, makes this dynamic all the more complex. India’s traditional emphasis on strategic autonomy should, in theory, preclude capitulation to third-party geopolitical exigencies. But the optics of this trade development suggest something closer to acquiescence rather than negotiation.
Tariff cuts and their limits
Scrutinising the announced 18 per cent tariff level reveals that its competitive edge is more nuanced than the headlines suggest. While it is true that the effective tariff burden on Indian goods entering the US market has dropped, providing relief to exporters in sectors such as textiles, gems, jewellery and engineering goods, this figure must be contextualised against the backdrop of non-tariff barriers that remain in force.
For instance, the US maintains elevated Section 232 tariffs on steel and aluminium: products central to India’s industrial exports, and duties on certain automotive components persist well above the headline 18 per cent. Moreover, comparative tariff rates enjoyed by competitors under preferential schemes provide an enduring advantage that India has yet to secure.
In a globalised economy where supply chains are shaped as much by regulatory standards, intellectual property protections, market access for services, and mutual recognition of product standards, a tariff cut alone is unlikely to catalyse a transformative shift in bilateral trade balances. Indeed, the aspirational target often cited, doubling bilateral trade to $500 billion by 2030, remains a distant prospect without a formal, comprehensive free trade agreement (FTA) with enforceable provisions.
Herein lies the crux of the matter: India has secured a reset in tariff rates, but not necessarily a trade architecture capable of securing long-term economic integration on equitable terms.
Who benefits?
Perhaps the most controversial element of the US narrative is the claim that India has agreed to purchase an unprecedented volume of American goods, including energy, technology, agricultural products, coal, and defence equipment, amounting to over $500 billion. While this figure came from Washington, there is no corroborating confirmation from New Delhi. PM Modi’s own remarks avoided mentioning any such commitment; this discrepancy is not trivial.
If, indeed, India were to obligate itself to procure such a vast quantum of US products, the competitive impact on domestic priorities must be questioned. A procurement program of that scale would dramatically affect India’s trade balance and the production sector, exert upward pressure on the current account, and potentially crowd out domestic manufacturing capacities. More critically, it would represent a departure from India’s established policy of promoting “Make in India” and reducing external dependencies.
This asymmetry in communication, with Trump laying out specific conditional frameworks and Modi focusing solely on tariff reductions and cooperation, hints at a broader diplomatic choreography. New Delhi’s selective engagement suggests an attempt to manage domestic political optics, perhaps to avoid the perception of being coerced on energy and procurement commitments that may be unpopular at home.
Beyond economics, the strategic dimension of the US push is evident. Washington has shown willingness to align trade incentives with broader geopolitical goals, including countering Russian influence and reshaping supply chains in Asia. For India, aligning too closely with US priorities on energy and defence could constrain its longstanding policy of non-alignment. A recalibration of this magnitude demands clear domestic debate, yet such deliberation has been conspicuously absent in public discourse.
Triumph or tactical retreat?
This India–US trade announcement is less a fully formed triumph and apparently a tactical retreat under pressure. The 18 per cent tariff headline provides tangible relief to Indian exporters and offers diplomatic theatre for both capitals. But beneath that veneer lie unanswered questions about commitments, strategic concessions, and the very nature of the “deal” itself.
For India, the pursuit of closer economic engagement with the United States is understandable; Washington remains a central node in global trade networks and a crucial strategic partner. Yet engagement must not morph into capitulation, particularly when core elements of national economic policy, such as energy security, market sovereignty, and industrial strategy, risk being subordinated to external strategic imperatives.
The fact that Prime Minister Modi’s public statements omit key assertions made by President Trump is telling. It suggests an instinct to manage domestic perception, but it also underscores the absence of a robust, jointly articulated agreement with clear terms. In the absence of such clarity, India risks being portrayed, and perhaps treated, not as an equal negotiating partner, but as a subordinate in a deal framed largely on Washington’s terms.
Real economic diplomacy requires transparency, balance and reciprocity. Tariff headlines alone cannot substitute for these fundamentals. India’s leadership now faces a choice: to clarify, codify, and contextualise this engagement within a broader, balanced economic framework—or to allow speculation about unilateral concessions to define its global economic strategy.
Finally, the question is not whether tariffs were cut, but whether India has secured a trade relationship that advances its national interests—economically, strategically, and diplomatically—or one that precludes independent decision-making under the weight of geopolitical conditionality.
The writer is an author, political analyst, and columnist (X: @ens_socialis).
The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK.