India-US Trade Deal: India and the United States’ relations are much better at present compared to what it was years ago. However, US President Donald Trump’s flip-flops are making it prone to vulnerability. While Trump imposed a reciprocal tariff on India, which was subsequently reversed, the US President’s latest remark after India-Pakistan skirmishes has rung a bell in New Delhi. Trump said that he used trade as a threat to make India and Pakistan agree to a ceasefire. This marked one of the rare events in global diplomacy where a sitting President’s remark was categorically rejected by the partner nation. The Ministry of External Affairs said that no trade-related remarks were made during the talks concerning the Indo-Pak ceasefire between India and the United States. Trump later claimed that India offered zero tariffs on a reciprocal basis. Again, his statement was contradicted by EAM Dr S Jaishankar. “Between India and the US, trade talks have been going on. These are complicated negotiations. Nothing is decided till everything is. Any trade deal has to be mutually beneficial; it has to work for both countries. That would be our expectation from the trade deal. Until that is done, any judgment on it would be premature,” said Jaishankar.
Notably, the US total goods trade with India was an estimated $129.2 billion in 2024. US goods exports to India in 2024 were $41.8 billion, up 3.4 per cent ($1.4 billion) from 2023. US goods imports from India totalled $87.4 billion in 2024, up 4.5 per cent ($3.7 billion) from 2023. PM Narendra Modi, and President Trump announced ‘Mission 500’ on February 13, aiming to more than double the bilateral trade to $500 billion by 2030. The two leaders also launched a new initiative – the “U.S.-India COMPACT (Catalysing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century” – to drive transformative change across key pillars of cooperation.
Trump’s remark has created a flutter in India with people questioning whether New Delhi can trust Washington amid its support for Pakistan. Former Indian Foreign Secretary Kanwal Sibal said Trump’s remarks at Doha about India are full of misinformation and politically insensitive. “He keeps bashing India as a tariff king even when the two sides are negotiating a trade deal. Trump claims the US is not even among the first 30 countries that export to India. Totally wrong. The US is the fourth largest exporter to India after China, Russia and the UAE. Why don’t his advisers brief him properly?” said Sibal.
He went on to criticise Trump for his zero-tariff claim. “He then wrongly claims India has proposed a zero tariff regime. On agriculture? As for Apple manufacturing in India, he is targeting India when shifting of supply chains from China to India is widely accepted as desirable. If he doesn’t want US companies to manufacture in India, what does all this talk of India-US ties being the defining relationship of the 21st century?” said Sibal.
The former secretary said that Trump is devaluing India-US ties bilaterally and internationally by his undigested talk.
Former Pentagon official Michael Rubin, a senior fellow at the American Enterprise Institute, wrote in his blog that by bragging about how he could leverage trade to stop fighting, not only did Trump draw moral equivalence between terror-sponsoring Pakistan and terror-victim India, but he signaled to India that the whims of US leaders would endanger its defense supply chain into the future.
“Trump has now traded that for a few seconds of bragging about his alleged role in securing a ceasefire. Adding insult to injury, his comments came just before Modi was to address India on what otherwise appeared to be a clear victory over Pakistan. By bragging about how he could leverage trade to stop fighting, not only did Trump draw moral equivalence between terror-sponsoring Pakistan and terror-victim India, but he signalled to India that the whims of US leaders would endanger its defence supply chain into the future. In the long term, India will further develop its own defence industry, but in the short term, Trump has pushed American defence workers under the bus to make France great again. Sometimes, the cost of bragging can be measured in billions of dollars,” he highlighted.
With India maintaining that trade talks are underway and it would be too early to make any comment about the same, former Ambassador Manjeev Puri said that it’s not the hour for jumping the gun.
“Trump has made the tariffs a major point of his achievement and policy. It’s a kind of prestige issue for him. He is very happy telling the world that nobody uses tariffs the way I am doing. That’s his persona. He will continue to say what he wants to say. On the other hand, there are discussions, seriousness to the trade talks. We should wait and watch how things work out, and at the end of the day, the government will make the best decision in the national interest. Negotiations are always a two-way street,” said Puri.
While all eyes are on the India-US trade deal, the damage has been done with Trump’s remark. Trump has just nuked the billions in potential US-India defence deals with his remark about using trade as leverage to pressure India, feel experts. While his comments have already made America an unreliable partner, it’s totally up to India how it perceives the message. But there is no doubt that India will now be more cautious when finalising the defence deal with the US.