The recently announced interim India-US trade framework was welcomed in financial markets with enthusiasm. Tariffs were cut, export sectors cheered, and policymakers projected confidence.
However, once the initial euphoria settles, the contours of the deal appear more complex. Critical questions remain around tariff balance, agricultural safeguards, oil procurement, and the feasibility of a $500 billion purchasing commitment. As negotiations continue, the debate is shifting from celebration to scrutiny.
The Tariff Question: Is The Deal Evenly Balanced?
The United States has reduced tariffs on Indian goods to 18 per cent from 50 per cent. However, this reduction applies only to about 55 per cent of Indian exports currently facing reciprocal tariffs.
In contrast, India has promised to reduce its standard tariffs on all US industrial goods and several food and agricultural products.
The Delhi-based Global Trade and Research Initiative (GTRI), as cited by BBC, described this as suggesting an “uneven exchange”. Opposition leaders, including former finance minister P Chidambaram, have argued that the framework is “heavily tilted in favour of the US and the asymmetry is obvious”.
Commerce Minister Piyush Goyal has defended the pact, stating that the 18 per cent tariff charged by the US is among the lowest faced by its trading partners. He has argued that the reduction will significantly benefit labour-intensive sectors such as textiles, leather, gems and jewellery.
Most industry associations have welcomed the deal. But analysts say the real evaluation depends on the fine print, particularly product-level concessions and long-term tariff trajectories.
The $500 Billion Pledge: Ambitious Or Unrealistic?
One of the most striking elements of the framework is India’s stated intention to purchase $500 billion worth of US goods over five years.
These purchases would include energy, aircraft, technology products and coking coal.
Critics have questioned whether this target is achievable. According to GTRI, meeting the commitment would require India’s annual imports from the US to more than double every year.
Since many of these imports depend on private sector decisions, including airlines, refiners and technology firms, government assurances alone may not be sufficient.
Systematix Research, quoted by BBC, warned that such a commitment “risks inflating India’s import bill and eroding its trade surplus with the US”, potentially putting pressure on external balances over time.
Goyal, however, has described the target as “extremely conservative”, pointing to rising energy demand, aircraft purchases and expanding data centre infrastructure.
The debate here is not merely about numbers, but about economic leverage: whether such a purchasing commitment could limit India’s flexibility in future negotiations.
Russian Oil: The Most Politically Sensitive Unknown
Perhaps the most sensitive unresolved issue concerns Russian oil.
While US President Donald Trump stated that India was committed to halting Russian oil purchases, the joint statement itself does not contain such language.
In a separate executive order, Trump said the US would monitor whether India resumed Russian oil purchases “directly or indirectly” and that this would determine whether a 25 per cent import duty would be re-imposed.
Commerce Minister Piyush Goyal told news agency ANI that oil buying decisions are taken by “individual companies” and that the trade deal “does not decide who will buy what and from where”.
Russia has stated that it has received no indication from Delhi that supplies will stop.
According to Reuters, some Indian refiners are avoiding new Russian oil purchases, although deliveries already contracted are continuing.
The lack of an explicit Indian commitment has fuelled opposition criticism. Strategic affairs expert Brahma Chellaney wrote on X that by linking tariff relief to oil purchases, Washington had “effectively weaponised trade to constrain Indian foreign policy”.
The issue goes beyond energy procurement. It touches on India’s strategic autonomy and whether trade concessions could translate into geopolitical pressure.
Farmers’ Fears: Agriculture Back In The Political Spotlight
If oil raises foreign policy concerns, agriculture raises domestic political ones.
Reuters reported that Indian farm unions and opposition parties have called for nationwide protests, arguing that increased US agricultural imports could hurt the farm sector.
The Samyukt Kisan Morcha (SKM), which led the large-scale farm protests in 2020-21, said the deal would allow imports of subsidised US farm products that could depress domestic prices and hurt rural incomes.
Rakesh Tikait told Reuters, “We are worried about the India-US trade deal, as it would hurt Indian farmers, who are far more vulnerable than their American counterparts.”
He pointed out that US farmers benefit from larger landholdings and higher subsidies, while Indian farmers face weak infrastructure and rising cultivation costs.
SKM national secretary Purushottam Sharma told the news agency, “We will not allow the government to open up the Indian farm sector for American companies,” adding that lower tariffs on crude soyoil, currently taxed at about 16.5 per cent, would hurt domestic oilseed producers.
Apple growers have also voiced concern. The Kashmir Valley Fruit Growers-cum-Dealers Union urged Prime Minister Narendra Modi to impose import duties of more than 100 per cent on US apples, noting that more than 700,000 families depend on horticulture in key apple-producing states.
The opposition Congress party has described the pact as a “total surrender” and questioned the lack of detailed product lists.
The government maintains that staples such as rice, wheat, corn and dairy products remain protected, and that export opportunities for basmati rice, fruits, spices, coffee and tea will expand.
But for farmers, the absence of full tariff schedules and product-line disclosures is creating distrust.
What We Still Don’t Know
Several core uncertainties remain:
•The exact list of “additional agricultural products” facing tariff reductions.
• Whether the $500bn purchase intention is binding or indicative.
• Whether future Russian oil purchases could trigger renewed US penalties.
• How tariff reductions will interact with domestic subsidy disparities.
Markets have responded positively. Indian stock indices rose sharply following the announcement, buoyed by expectations of lower tariffs and deeper economic ties.
But trade agreements are rarely judged solely by initial investor sentiment. Their long-term impact depends on implementation, sectoral adjustment and political sustainability.
A Deal Still In Motion
The interim framework is not yet a fully ratified treaty, and several operational details remain to be negotiated. That matters. Trade agreements often look very different once tariff schedules, safeguard clauses and enforcement mechanisms are published.
At present, the agreement rests on broad commitments and political signalling.
For policymakers, the challenge now is not merely to defend the deal, but to explain its mechanics with precision. For industry, the task is to convert headline tariff relief into measurable export gains. For farmers, the key concern is whether safeguards will prove durable once imports begin to flow.
Markets may celebrate frameworks. But trade agreements are ultimately tested in warehouses, ports, mandis and balance sheets.
The questions surrounding oil purchases, tariff symmetry and agricultural exposure are not peripheral, they sit at the centre of how this agreement will be judged in hindsight. Until those uncertainties narrow, the India-US trade deal remains a work in progress rather than a settled chapter.
