Union Commerce and Business Minister Piyush Goyal at a press convention on the India-U.S. commerce deal in New Delhi on February 7. Whereas India’s intention to buy $500 billion price of U.S. items within the subsequent 5 years is talked about within the textual content of the interim settlement, there isn’t any reciprocal dedication to extend U.S. imports from India to an analogous stage.
| Picture Credit score: PTI
The “framework for an Interim Settlement concerning reciprocal and mutually helpful commerce”, introduced by the U.S.-India joint assertion issued on February 6, raises critical issues concerning India’s financial and geopolitical future. An unequal and unfair bilateral commerce deal is being openly imposed on India by the Trump administration. By agreeing to such phrases, the Modi authorities is surrendering India’s nationwide curiosity.
Unequal commerce deal
The very premise of the Interim Settlement, outlined as “a typical dedication to reciprocal and balanced commerce based mostly on mutual pursuits and concrete outcomes”, works in opposition to India’s financial pursuits. The present nominal GDP of the U.S. is seven occasions bigger than India’s GDP and its per capita revenue is over 30 occasions larger than that of India. Why has the Indian authorities made commitments in the direction of “reciprocal and balanced commerce” with a a lot bigger and richer economic system?
As per the textual content of the settlement, India has agreed to zero or lowered tariffs for “all U.S. industrial items and a variety of U.S. meals and agricultural merchandise, together with dried distillers’ grains (DDGs), purple sorghum for animal feed, tree nuts, contemporary and processed fruit, soybean oil, wine and spirits, and extra merchandise”. India has additionally agreed to remove non-tariff limitations (NTB) on U.S. exports of ICT items, medical units, meals and agricultural merchandise, and so forth. India’s intention to buy $500 billion price of U.S. vitality merchandise, plane and plane components, valuable metals, know-how merchandise, and coking coal over the subsequent 5 years has additionally been constructed into the textual content of the framework settlement.
Such large commerce concessions to the U.S. may utterly remodel the construction of India’s overseas commerce. The U.S. has been the most important marketplace for Indian items exports since lengthy, with Indian exports to the U.S. crossing $86 billion in 2024-25, accounting for over 19% of India’s whole exports of $437 billion. Whereas India’s commerce deficit expanded to $283 billion in 2024-25, it had a commerce surplus of over $40 billion with the U.S. In 2025-26 (April-December), India’s items commerce surplus vis-a-vis the U.S. stood at $26 billion, with imports from the U.S. crossing $ 39 billion.
It’s noteworthy that whereas India’s intention to buy $500 billion price of U.S. items within the subsequent 5 years is talked about within the textual content of the interim settlement, there isn’t any reciprocal dedication to extend U.S. imports from India to an analogous stage. This totally exposes the Modi authorities’s exaggerated claims of enhanced potential for Indian exports following the discount of the U.S. reciprocal tariff price to 18%. Such an unfair bilateral commerce settlement will remove India’s current commerce surplus vis-a-vis the U.S. and convert it right into a deficit within the subsequent 5 years, with a surge of American imports into India. The losses of home market shares by Indian industrial producers and farmers will far exceed the positive factors made by Indian exporters, if any.
Eroding financial sovereignty
The U.S. President has additionally issued a separate Government Order on February 6, alongside the discharge of the U.S.-India joint assertion, making it clear that the withdrawal of the extra 25% import obligation on Indian exports, is conditional to India’s discontinuation of crude oil imports from Russia. The manager order states: “Particularly, India has dedicated to cease straight or not directly importing Russian Federation oil, has represented that it’s going to buy United States vitality merchandise from the US, and has just lately dedicated to a framework with the US to increase protection cooperation over the subsequent 10 years.”
The order goes on to state that the U.S. Secretaries of Commerce and Treasury will monitor India’s oil purchases, and the extra 25% import obligation shall be reimposed by the U.S. if India “resumes straight or not directly importing Russian Federation oil”.
Knowledge from the Indian Ministry of Commerce and Business counsel that India’s crude oil imports from Russia elevated from 50.85 million metric tonnes in 2022-23 to 83.02 MMT in 2023-24 and additional to 87.54 MMT in 2024-25. The value per barrel of Russian crude oil had declined from $79.41 to $66.49 between April 2022 and March 2025. The share of Russian Urals oil in India’s whole crude oil imports rose from under 2% in 2020-21 to over 35% in 2024-25. Russian crude’s share has already began falling in 2025-26, and is anticipated to drop under 20% by the monetary year-end.
The Modi authorities’s genuflection on Russian oil imports at a reduced price can presumably increase India’s present account deficit and additional devalue the rupee, moreover reversing the moderation of home retail inflation. The interim commerce settlement, seen in totality with the U.S. President’s Government Order on Russian oil imports by India, is a recipe to rob India’s strategic autonomy and remodel its economic system into an American dependency. Parliament should restrain the Modi authorities from inflicting such irreparable self-harm.
Prasenjit Bose is an economist and Congress chief. Views expressed are private
Printed – February 09, 2026 12:42 am IST
