Regardless of all of the fanfare and hoopla in Congress, it could be untimely to reward or criticize the India-US bilateral commerce settlement simply because it has not but been concluded. However the Framework for an Interim Settlement on Reciprocal Commerce introduced final week (the settlement itself is anticipated to be introduced within the coming weeks) follows a course of and path that ought to make everybody nervous. The basic aim of the Narendra Modi authorities ought to be to strengthen India’s economic system and alleviate the insupportable burden that the Trump administration within the US imposed on India by way of 50% tariffs, however the query to ask is how and at what price? The Indian authorities ought to think about whether or not this might function a template for all different future strategic, financial, or protection agreements between India and the US.
America’s unilateral announcement
All bulletins in regards to the deal to this point have been made unilaterally by the US authorities, and New Delhi is scrambling to catch up. The primary indication that the 2 international locations had agreed to proceed with negotiations, which started in February 2025, got here from a social media publish by US President Donald Trump on February 2, 2026. In it, he gives a number of particulars of his conversations with Prime Minister Narendra Modi, all of which have been integrated right into a joint assertion and government order issued on February 6, 2026 — claiming that Mr. Modi agreed to cease shopping for Russian oil and to purchase “much more” oil from Russia. US. In trade for the 18% tariff imposed by the US on Indian items, India would decrease its tariffs and non-tariff obstacles to the US to “zero,” and Mr. Modi promised to “purchase” $500 billion price of American items.
Modi’s subsequent publish merely mentioned that U.S. tariffs could be lowered. 4 days later (4 a.m. US time), Washington launched a joint assertion and two government orders on Russia and Iran, adopted by a “truth sheet.” The Press Info Bureau issued a joint assertion just a few hours later. The federal government has since declined to have interaction with different paperwork in public remark. Nevertheless, the very methodology of unilaterally citing the “Joint Assertion” raises questions. Who has the decision-making energy?
The nuts and bolts of the ultimate commerce regime being mentioned, similar to tariffs, non-tariff obstacles and market entry, could possibly be thought-about when India and the US signal an “interim settlement” on commerce, anticipated subsequent month. Nevertheless, the concessions given to safe an interim settlement are clearly set out and are a trigger for excellent concern. Though the International and Commerce Departments are attempting to separate the commerce deal from Trump’s government order on Russian oil, they’re really a part of the identical raft. Trump’s truthful social posts, paperwork launched on February sixth, and White Home truth sheets revealed on February tenth are all listed collectively.
The US has introduced that it has lifted the 25% punitive tariffs on India (imposed in August 2025) based mostly on the next three understandings. India will cease buying Russian crude oil. It has already begun to take action, and mentioned the US would reimpose tariffs if India resumed Russian oil provides. Mr. Trump additionally established a committee of senior authorities officers to watch India’s oil consumption. Maybe much more stunning is that the order states that India has agreed to “cooperate totally with the US on nationwide safety, overseas coverage, and financial points.”
The Indian authorities has to this point not denied any of those claims, as a substitute issuing a prolonged assertion outlining India’s power procurement priorities and the necessity to diversify provide sources. On the bottom, the development is obvious: India’s Russian oil imports have been declining since November 2025, and oil purchases in December 2025 collapsed to a 38-month low. Russia now accounts for 25% of oil consumption, up from 40% in 2024.
Opposite to Exterior Affairs Minister S. Jaishankar’s insistence that India prioritizes low-cost oil for customers, and his description of US punitive tariffs as “unfair, unjust and unreasonable”, India is presently shopping for much less Russian crude oil, simply because the low cost on Russian crude oil is rising. Different concessions, similar to zero tariffs in some areas and a promise to purchase $500 billion price of American items, require additional scrutiny. Shopping for such massive portions of U.S. items would restrict the scope for imports from different buying and selling companions and provide Washington phrases that will not be prolonged to international locations that just lately signed commerce offers with India. These embrace the European Union, the European Free Commerce Affiliation and New Zealand, and we are going to probably obtain questions from these international locations.
For sure, growing international locations and the International South, which as soon as supported India’s refusal to again down even within the face of unilateral sanctions exterior the United Nations, will proceed to observe carefully. Because of this, additionally it is vital to grasp the influence of the US settlement on India’s diplomatic standing in different international locations.
US request sample
If India accepts the U.S. ultimatum to droop Russian oil imports, it could mirror its 2019 method of compliance relating to the abandonment of Iranian and Venezuelan oil — at first resisting after which finally bowing to U.S. strain months later. The US is now asking India to purchase US and US-controlled Venezuelan oil, and for India to desert the Chabahar port mission and all commerce with Iran.
If New Delhi agrees to all this, it won’t solely lose respect and goodwill for the international locations in query (with which India was dedicated to increasing commerce and funding), but additionally its credibility as a purchaser and provider in markets all over the world. This could possibly be notably troubling for India, which is making ready to host this yr’s BRICS summit, which can even embrace leaders of Russia, Iran and different growing international locations.
India-US “commerce deal”: What’s going to India achieve from it?
The following query New Delhi should ask itself is that this. If the one strategy to do enterprise with the US is to just accept “unfair, unjust, and unreasonable” measures similar to tariffs, what does this imply for the strategic relationship with the US? Will all agreements on strategic relations, together with protection agreements, navy cooperation, the Quad (India, Australia, Japan, and the US) and the Indo-Pacific, counterterrorism, and India’s neighbors, observe this sample? Not solely did the US agreements with Pakistan and Bangladesh spotlight the US authorities’s restricted consideration for India’s pursuits within the area, however US insistence that India halt Russian oil imports, scale back commerce with Iran, and halt improvement of Chabahar will solely additional profit China. It’s price noting that India is the one nation the place the US has imposed punitive tariffs of 25% on Russian oil, with China and Turkiye additionally being main patrons. In 2022, Mr. Modi’s refusal to publicly criticize Russia for its invasion of Ukraine was seen as a coercion of India-Russia relations, an abandonment of the precept of territorial integrity in favor of realism. Giving up Russian oil as a compulsion for India-US relations in 2026 is neither principled nor reasonable.
India-US commerce deal: Piyush Goyal rejects claims that India has given in to US calls for
About India’s place
Lastly, the influence of this settlement may do essentially the most harm to India’s ideas of strategic autonomy, multi-alliance, and multipolarity, as it could slim slightly than diversify India’s choices not solely in power procurement, commerce, and connectivity, but additionally in broader worldwide relations. In 2019, Mr. Modi introduced that India had rejected the Regional Complete Financial Partnership (RCEP), citing dissatisfaction with China’s financial domination and citing Mahatma Gandhi’s talisman check, withdrawing from the settlement that the Indian authorities had been engaged on for 5 years. Within the face of agreements that impose way more egregious calls for on India’s sovereign selections, it could be stunning if the federal government didn’t topic the US deal to extra scrutiny earlier than finalizing it.
issued – February 14, 2026 12:16 AM IST
