3 months ago
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The “framework for an Interim Agreement regarding reciprocal and mutually beneficial trade”, announced done the U.S.-India associated connection issued connected February 6, raises superior concerns regarding India’s economical and geopolitical future. An unequal and unfair bilateral commercialized woody is being brazenly imposed connected India by the Trump administration. By agreeing to specified terms, the Modi authorities is surrendering India’s nationalist interest.
Unequal commercialized deal
The precise premise of the Interim Agreement, defined arsenic “a communal committedness to reciprocal and balanced commercialized based connected communal interests and factual outcomes”, works against India’s economical interests. The existent nominal GDP of the U.S. is 7 times larger than India’s GDP and its per capita income is implicit 30 times higher than that of India. Why has the Indian authorities made commitments towards “reciprocal and balanced trade” with a overmuch larger and richer economy?
As per the substance of the agreement, India has agreed to zero oregon reduced tariffs for “all U.S. concern goods and a wide scope of U.S. nutrient and cultivation products, including dried distillers’ grains (DDGs), reddish sorghum for carnal feed, histrion nuts, caller and processed fruit, soybean oil, vino and spirits, and further products”. India has besides agreed to destruct non-tariff barriers (NTB) on U.S. exports of ICT goods, aesculapian devices, nutrient and cultivation products, etc. India’s volition to acquisition $500 cardinal worthy of U.S. vigor products, craft and craft parts, precious metals, exertion products, and coking ember implicit the adjacent 5 years has besides been built into the substance of the model agreement.
Such monolithic commercialized concessions to the U.S. could wholly alteration the operation of India’s overseas trade. The U.S. has been the largest marketplace for Indian goods exports since long, with Indian exports to the U.S. crossing $86 cardinal successful 2024-25, accounting for implicit 19% of India’s full exports of $437 billion. While India’s commercialized shortage expanded to $283 cardinal successful 2024-25, it had a commercialized surplus of implicit $40 cardinal with the U.S. In 2025-26 (April-December), India’s goods commercialized surplus vis-a-vis the U.S. stood astatine $26 billion, with imports from the U.S. crossing $ 39 billion.
It is noteworthy that portion India’s volition to acquisition $500 cardinal worthy of U.S. goods successful the adjacent 5 years is mentioned successful the substance of the interim agreement, determination is nary reciprocal committedness to increase U.S. imports from India to a akin level. This thoroughly exposes the Modi government’s exaggerated claims of enhanced imaginable for Indian exports pursuing the simplification of the U.S. reciprocal tariff complaint to 18%. Such an unfair bilateral commercialized statement volition destruct India’s contiguous commercialized surplus vis-a-vis the U.S. and person it into a shortage successful the adjacent 5 years, with a surge of American imports into India. The losses of home marketplace shares by Indian concern producers and farmers volition acold transcend the gains made by Indian exporters, if any.
Eroding economical sovereignty
The U.S. President has besides issued a abstracted Executive Order connected February 6, alongside the merchandise of the U.S.-India associated statement, making it wide that the withdrawal of the further 25% import work connected Indian exports, is conditional to India’s discontinuation of crude lipid imports from Russia. The enforcement bid states: “Specifically, India has committed to halt straight oregon indirectly importing Russian Federation oil, has represented that it volition acquisition United States vigor products from the United States, and has precocious committed to a model with the United States to expand defense cooperation implicit the adjacent 10 years.”
The bid goes connected to authorities that the U.S. Secretaries of Commerce and Treasury volition show India’s lipid purchases, and the further 25% import work volition beryllium reimposed by the U.S. if India “resumes straight oregon indirectly importing Russian Federation oil”.
Data from the Indian Ministry of Commerce and Industry suggest that India’s crude lipid imports from Russia accrued from 50.85 cardinal metric tonnes successful 2022-23 to 83.02 MMT in 2023-24 and further to 87.54 MMT in 2024-25. The terms per tube of Russian crude lipid had declined from $79.41 to $66.49 betwixt April 2022 and March 2025. The stock of Russian Urals lipid successful India’s full crude lipid imports roseate from beneath 2% successful 2020-21 to implicit 35% successful 2024-25. Russian crude’s share has already started falling successful 2025-26, and is expected to driblet beneath 20% by the fiscal year-end.
The Modi government’s genuflection connected Russian lipid imports astatine a discounted complaint tin perchance grow India’s existent relationship shortage and further devalue the rupee, too reversing the moderation of home retail inflation. The interim commercialized agreement, seen successful totality with the U.S. President’s Executive Order connected Russian lipid imports by India, is simply a look to rob India’s strategical autonomy and alteration its system into an American dependency. Parliament indispensable restrain the Modi authorities from inflicting specified irreparable self-harm.
Prasenjit Bose is an economist and Congress leader. Views expressed are personal
