​End in sight: on the U.S.-India trade deal, America’s tariffs Politics & News

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News of the India-United States trade deal has brought palpable relief to a lot of Indian industries, but it also comes with persistent and important questions that remain unanswered despite a press statement by India’s Commerce Minister Piyush Goyal. The initial announcement, through social media, while true to U.S. President Donald Trump’s form, also marks a departure for India and Prime Minister Narendra Modi. Past trade deal announcements have all been made through more formal channels. The announcement of U.S. tariffs on Indian imports being cut to 18% from the existing 50% is certainly welcome. However, as of now, there is no clarity on when this would be implemented. While Mr. Trump said they would be cut “immediately”, Mr. Goyal said that the details will be shared “soon”. There is also considerable ambiguity over whether this is the first tranche or ‘mini-deal’ of a larger Bilateral Trade Agreement, a limited deal affecting only tariffs, or something in between. Mr. Trump’s assertion that Mr. Modi has “agreed to stop buying Russian oil” must also be addressed by the Indian government sooner rather than later. Mr. Goyal did not touch upon this in his statement. Stopping Russian oil entirely would not only force India to find alternatives for about a third of its oil imports but would also cast a shadow over its relations with Russia, which is a long-time friend and critical supplier of defence equipment. Such a move would announce a very definite realignment for India and, in that light, deserves to be discussed in Parliament first. Similarly, buying more Venezuelan crude comes with its own refining challenges.

There is also the question of what India has committed to the U.S. in terms of tariff concessions, investments and purchase orders. Apart from making the assurance that sensitive agricultural items and dairy would be excluded, the government has been silent despite several significant assertions being made by Mr. Trump and his team. While the “final stages of detailing” are still to be completed, as Mr. Goyal has said, the light at the end of the tunnel has already buoyed Indian stock markets, bolstered the rupee, and brought especial cheer to labour-intensive sectors such as textiles, apparel, footwear, leather and engineering goods that had been hurting from the 50% tariffs. These sectors already stand to gain from the India-European Union trade deal, which Mr. Goyal has assured will come into effect this year. The tariffs they will face in the U.S. will likely still be slightly higher than those enjoyed by competitors in the South-East Asian countries due to their Most-Favoured Nation status. Yet, the new deal stands to certainly enhance their competitiveness, and the targeted announcements in the Union Budget 2026 should also help bridge this narrower gap.