India-U.S. Interim Trade Agreement
The recent interim trade agreement between India and the U.S. marks a significant shift in their bilateral relations, addressing tensions that arose in August 2025 when former U.S. President Donald Trump imposed hefty tariffs on Indian imports.
Key Provisions of the Agreement
- The U.S. will reduce tariffs on Indian imports from 50% to 18%.
- India will eliminate or reduce tariffs and non-tariff barriers on U.S. industrial goods and a wide range of food and agricultural products.
- India has committed to halting direct and indirect imports of Russian oil, though Indian officials have not confirmed this.
- India will purchase $500 billion worth of U.S. energy products, aircraft, precious metals, technology products, and coking coal over the next 5 years.
Concerns and Implications
The agreement has sparked debate and raised several concerns:
- Potential Impact on Indian Agriculture: There is ambiguity concerning tariff protection for cereals, raising concerns about market access for U.S. agri-business.
- Non-Tariff Barriers: India is expected to resolve U.S. concerns, including the longstanding issue of importing Genetically Modified (GM) food products.
- Unequal Trade Terms: The agreement allows U.S. tariffs on Indian exports to rise significantly from an average of 2.5% to 18%.
- Surveillance on Oil Imports: The U.S. will impose additional tariffs if India resumes Russian oil imports, raising sovereignty concerns.
The agreement's impact on farmers and its implications for India's sovereignty and policy autonomy are crucial points of contention. Critics argue that the deal might compromise India's food security and economic interests.
