On 7th Feb morning at 4.29 AM, the Government released a press statement by PIB titled United States–India Joint Statement. The full agreement was not even made available to the Parliament, and the media is speculating and appreciating it, and industry leaders are lauding the interim agreement without even knowing the full details. The farmers’ movement, trade unions, and the opposition parties have called it a sell-out. The analysis based on the available information shows that it is a total surrender to the US.
- Five days before itself, Trump tweeted that India will stop buying Russian oil and India will buy $500 billion of American goods in 5 years.
- America is celebrating that India is going to buy more from the US while paying 18% tariff on Indian goods.
- The White House statement says: “Given India’s willingness to align with the United States to confront systemic imbalances in the bilateral trade relationship and shared national security challenges, the United States will lower the Reciprocal Tariff on India from 25% to 18%.”
The key terms of the Agreement include:
- India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products, including dried distillers’ grains (DDGs), red sorghum, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.
- India intends to buy more American products and purchase over $500 billion of U.S. energy, information and communication technology, coal, and other products. India will address non-tariff barriers that affect bilateral trade in priority areas.
- The United States and India will negotiate rules of origin that ensure that the agreed benefits accrue predominantly to the United States and India. India committed to negotiate a robust set of bilateral digital trade rules that address discriminatory or burdensome practices and other barriers to digital trade.
- The United States and India committed to strengthen economic security alignment to enhance supply chain resilience and innovation through complementary actions to address non-market policies of third parties, as well as cooperating on inbound and outbound investment reviews and export controls.
- The United States and India will significantly increase bilateral trade in technology products and expand joint technology cooperation.
THE PROSPEROUS PATH FORWARD FOR US
President Trump continues to advance the interests of the American people, enhancing market access for American exporters and lowering tariff and non-tariff barriers to protect economic and national security.
- India has maintained some of the highest tariffs on the United States of any major world economy, with tariffs as high as an average of 37% for agricultural goods and more than 100% on certain autos.
- India also has a history of imposing highly protectionist non-tariff barriers that have banned and prohibited many U.S. exports to India.
- In the coming weeks, the United States and India will promptly implement this framework and work toward finalizing the Interim Agreement with a view to concluding a mutually beneficial BTA to lock in benefits for American workers and businesses.
- In line with the roadmap set out in the Terms of Reference for the BTA, the United States and India will continue negotiations to address the remaining tariff barriers, additional non-tariff barriers, technical barriers to trade, customs and trade facilitation, good regulatory practices, trade remedies, services and investment, intellectual property, labor, environment, government procurement, and trade-distorting or unfair practices of state-owned enterprises.
LIBERATING AMERICA FROM UNFAIR TRADE PRACTICES
President Trump has challenged the assumption that American workers and businesses must tolerate unfair trade practices that have disadvantaged them for decades and contributed to the historic global trade deficit. Before Trump, India was paying 2–3% duty on most of the exports as per the WTO agreement.
Some of the points of the PIB statements are reproduced below:
Key terms of the Interim Agreement between the United States and India will include:
- India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products, including dried distillers’ grains (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.
- The United States will apply a reciprocal tariff rate of 18 percent under Executive Order 14257 of April 2, 2025 (Regulating Imports With a Reciprocal Tariff to Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits), as amended, on originating goods of India, including textiles and apparel, leather and footwear, plastic and rubber, organic chemicals, home décor, artisanal products, and certain machinery, and, subject to the successful conclusion of the Interim Agreement, will remove the reciprocal tariff on a wide range of goods identified in the Potential Tariff Adjustments for Aligned Partners Annex to Executive Order 14346 of September 5, 2025 (Modifying the Scope of Reciprocal Tariffs and Establishing Procedures for Implementing Trade and Security Agreements), as amended, including generic pharmaceuticals, gems and diamonds, and aircraft parts.
- The United States and India will address non-tariff barriers that affect bilateral trade. India agrees to address long-standing barriers to the trade in U.S. medical devices; eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions on, U.S. Information and Communication Technology (ICT) goods; and determine, with a view toward a positive outcome, within six months of entry into force of the Agreement whether U.S.-developed or international standards, including testing requirements, are acceptable for the purposes of U.S. exports entering the Indian market in identified sectors. Recognizing the importance of working together to resolve long-standing concerns, India also agrees to address long-standing non-tariff barriers to the trade in U.S. food and agricultural products.
India intends to purchase $500 billion of U.S. energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next 5 years. India and the United States will significantly increase trade in technology products, including Graphics Processing Units (GPUs) and other goods used in data centers, and expand trade.
So $500 billion does not include all imports by India. It is only related to the above materials. Actuals will be more. India will be importing more than double the import of 2025 every year.
What is worrying is also the security cooperation and technology cooperation. It was the US which refused to provide steel technology to Nehru, which was later given by the USSR to us. The US refused to give us cryogenic technology for our space mission, and our scientists developed it through hard work.
Depending fully on one country which dictates its terms is dangerous. The US is also predicted to lose its strength in military competitiveness as well as economic strength, as China has advanced in both. There is mounting pressure on Trump to reverse his policies. He is not trusted by any country. If war against Iran starts, it is going to last for long and see realignment of forces. The US is going to suffer also.
With this background, let us see what India imports from the USA.
Major Product Categories Imported from the USA (2024–2025):
- Mineral Fuels & Oils: The largest category, including crude petroleum, coal, and distillation products ($12.29B – $14.34B).
- Machinery & Equipment: Nuclear reactors, boilers, and mechanical appliances ($3.29B – $5.78B)
- Gems & Precious Metals: Pearls, diamonds, and precious stones/metals ($2.25B – $5.31B).
- Electronics & Electricals: Machinery, equipment, and parts ($2.00B – $3.38B).
- Medical & Technical Instruments: Optical, photo, and medical apparatus ($2.32B).
- Aircraft & Spacecraft: Significant imports of aircraft and related parts ($757M – $3.0B).
- Chemicals & Plastics: Organic chemicals, miscellaneous chemical products, and plastics.
- Agricultural Products: Edible fruits, nuts, and industrial raw materials like cotton.
In FY25, the bilateral trade between India and the US stood at a record US$132.2 billion as against US$119.71 billion in FY24. In FY25, India had a trade surplus of US$40.82 billion with the US. Imports from the US to India rose to US$45.69 billion in FY25 from US$42.19 billion in FY24. India imported 5,695 commodities from the US in FY25.
To fulfil the agreement, India has to more than double the imports every year. The US wants the trade surplus to be brought to nil. This will be a huge drain on India’s foreign exchange reserves and the GDP.
In addition, India is going to import American planes, jets, and weapons. The import dependence will destroy Indian agriculture, industries, and the MSMEs which provide the largest employment.
For example, with zero duty on Harley Davidson motorcycles, Indian high-end motorcycles like Royal Enfield, Hero, Kawasaki, TVS, etc., which are produced in India will lose, leading to huge loss of employment.
With high-end Mercedes and other cars, Tatas and Mahindras will lose, which again will lead to loss of employment (this is in addition to BMW and other cars from Europe due to FTA with Europe).
Surat diamonds may not be able to compete with US diamonds.
Agricultural products will destroy Indian farmers. As of now, milk may not be imported, but the animal feeds will be from the US.
Because of the agreement, whether you want or not, you have to import. The burden will fall on oil PSUs and other PSUs.
The 10% rich who own the wealth of the country will be happy with the cars and motorcycles which they consider status symbols and eat American apples and almonds. 90% of the people will be at loss.
Let’s look at the exports:
India Exports to United States was US$79.44 billion during 2024, according to the United Nations COMTRADE database on international trade. India Exports to United States – data, historical chart and statistics – was last updated on February 2026.
|
India Exports to United States |
Value |
Year |
|---|---|---|
|
$79.44B |
2024 |
|
|
$12.33B |
2024 |
|
|
$9.15B |
2024 |
|
|
$8.72B |
2024 |
|
|
$6.48B |
2024 |
|
|
$4.38B |
2024 |
|
|
$2.92B |
2024 |
|
|
$2.90B |
2024 |
|
|
$2.62B |
2024 |
|
|
$2.56B |
2024 |
|
|
$2.55B |
2024 |
|
|
$2.55B |
2024 |
|
|
$1.95B |
2024 |
|
|
$1.62B |
2024 |
|
|
$1.24B |
2024 |
|
|
$1.18B |
2024 |
|
|
$1.14B |
2024 |
|
|
$935.51M |
2024 |
|
|
$912.59M |
2024 |
|
|
$875.81M |
2024 |
|
|
$841.91M |
2024 |
|
|
$736.50M |
2024 |
|
|
$596.80M |
2024 |
|
|
$488.28M |
2024 |
|
|
$484.57M |
2024 |
USA is the 3rd largest investor in India with cumulative foreign direct investment (FDI) inflows of US$70.65 billion from April 2000–March 2025.
- India’s exports to the US increased from US$77.51 billion in FY24 to US$86.51 billion in FY25.
- India exported 7,174 commodities to the US in FY25.
- Major exported items from India to the US include electrical machinery and equipment and parts (US$15.89 billion), natural or cultured pearls, precious or semiprecious stones, precious metals, clad with precious metal and articles (US$9.97 billion), pharmaceutical products (US$9.78 billion), nuclear reactors, boilers, machinery and mechanical appliances (US$6.69 billion), mineral fuels, mineral oils and products of their distillation (US$4.20 billion), and articles of iron or steel (US$3.11 billion), among others in FY25.
- This will destroy fish exports, MSMEs, and industries who have to pay 18% tariff instead of 2–3%. Huge loss of employment will take place. Some of the largest industries and industrialists like Adani, Ambani, and Tatas will withstand as well as benefit from the arrangement because they import as well as export, and the Government will provide them all concessions and the banks will give them cheap credit.
RECENT TRENDS & DEVELOPMENTS SINCE 2022
- India and the United States are set to sign a new 10-year defence framework in 2025/26, aimed at enhancing strategic cooperation, defence industrial collaboration, and regional security in the Indo-Pacific. The agreement builds on the February 2025 joint statement by Prime Minister Mr. Narendra Modi and President of the United States Mr. Donald Trump, focusing on co-production, technology sharing, and joint military exercises.
- In February 2025, the United States and India announced an expanded partnership in space innovation, focusing on joint research, commercial collaboration, and startup engagement. This initiative aims to strengthen bilateral cooperation in space technology and exploration.
- Prime Minister Mr. Narendra Modi met US President Mr. Joe Biden in Wilmington, Delaware, during the Quad Summit. Discussions focused on enhancing the India-US comprehensive global strategic partnership, covering bilateral cooperation, global and regional issues, and Indo-Pacific dynamics.
- India and the USA commenced the 20th edition of their annual joint military exercise, YUDH ABHYAS-2024, on 9th September 2024 at the Mahajan Field Firing Ranges, Rajasthan.
- On February 15, 2024, India and the United States agreed to extend the political compromise outlined in the October 21 Joint Statement until June 30, 2024, as stated in the “Updated 21st October Joint Statement”.
- US Ambassador to India, Mr. Eric Garcetti, called on Home Minister Amit Shah on July 11, 2023, and discussed “building on the positive outcomes” of Prime Minister Mr. Narendra Modi’s visit to the US two weeks ago, the first such meeting between a US envoy and the Home Minister since 2015.
- US Secretary of Energy, Ms. Jennifer M. Granholm, and Indian Minister of Petroleum and Natural Gas Mr. Hardeep Singh Puri held the third ministerial meeting of the US-India Strategic Clean Energy Partnership in July 2023, which was launched in September 2021.
- A US-India Defence Acceleration Ecosystem (INDUS-X) was set up “as a network of universities, startups, industry, and think tanks to facilitate joint defense technology innovation and co-production of advanced defence technology.” The US Department of Defense Space Force has signed its first International Cooperative Research and Development Agreement with two Indian startups.
- The Joint Statement issued by the US President Mr. Joe Biden and the Prime Minister of India Mr. Narendra Modi, after their meeting on June 22, 2023, spoke of the two countries being “among the closest partners in the world” and of a “new level of trust and understanding.”
- The India-US Defence Industrial Cooperation Roadmap, which concluded in May 2023, seeks to fast-track technology cooperation and co-production in areas of mutual interest. The India-US Defense Acceleration Ecosystem (INDUS X) – a network of universities, incubators, corporates, think tanks, and private investment stakeholders – was launched in June 2023.
- The United States and India launched a new high-level partnership, the “US-India Climate and Clean Energy Agenda 2030 Partnership,” which envisages bilateral cooperation on strong actions in the current decade to meet the goals of the Paris Agreement.
- India and the United States have signed an agreement for cooperation in the development of Air-Launched Unmanned Aerial Vehicles (ALUAV) to expand bilateral defense and military cooperation.
- In 2022, India and the United States signed a bilateral space situational awareness arrangement, and this will support greater information sharing and cooperation in space.
- India is actively participating in the US-led Global Action Plan (GAP) framework launched in February 2022 to bridge policy gaps and end the COVID pandemic. Under GAP, India is leading in three areas: get shots in arms, supply chain resilience, and capacity building for healthcare workers.
- The India-U.S. 2+2 Annual Ministerial Dialogue, led by the External Affairs Minister and their respective counterparts, reviews bilateral ties in defense, strategic, and security domains, as well as important regional and global issues. The fourth 2+2 Dialogue was held on April 11, 2022, in Washington, D.C.
- India and the United States are set to sign a Memorandum of Understanding (MoU), which will clear the way for ISRO’s ‘NETRA’ in Bengaluru to start collaborating with the American Combined Space Operation Center (CSpOC) to protect satellites of both nations from natural and man-made threats. It will create a framework for India and the US to share data about space debris and other objects and the potential threat they could pose to the safety and security of the new and existing satellites and other space assets of the two nations.
- The Investment Incentive Agreement between the Ministry of Finance and the U.S. Development Finance Corporation (DFC) was signed on May 23, 2022, to enable enhanced investment support provided by US DFC in India.
- The 3rd Counter Narcotics Working Group (CNWG) meeting between India and the US was held in New Delhi on July 7, 2022. The Indian delegation was led by the Director General, Narcotics Control Bureau. An Amended Letter of Agreement (ALOA) for cooperation in drug-related matters was signed.
- Prime Minister Mr. Narendra Modi made his first State Visit to the US from 21–23 June 2023 at the invitation of the President of the USA, H.E. Mr. Joseph R. Biden. In addition to a bilateral meeting with President Biden, he addressed a Joint Meeting of the US Congress and interacted with business and thought leaders.
- President of the USA, H.E. Mr. Joseph R. Biden, visited New Delhi from 8–10 September 2023 to attend the G-20 Leaders’ Summit. President Biden and PM Modi had a bilateral meeting and co-hosted a group of G20 leaders to accelerate investments in high-quality infrastructure projects and the development of two economic corridors through the India Middle East Europe Economic Connectivity Corridor and the Partnership for Global Infrastructure and Investment (PGI).
- An Investment Incentive Agreement between our Ministry of Finance and the U.S. International Development Finance Corporation (DFC) was signed in 2022 to enable equity investment, co-insurance, grants, feasibility studies, and technical assistance. As of March 2023, DFC’s India portfolio stood at more than US$3.1 billion across 100+ projects.
From leader of Non-Aligned Nations, we have become a slave of the US. That’s why Trump decides from whom we can import, to whom we can export, and what aircraft, arms, and ammunition we can buy.
Russia was our all-weather partner whom we are going to lose. BRICS no longer trusts us. Keeping all eggs in one basket is dangerous. Like China, which has reduced trade with the US but expanded trade with other countries, we had a chance to diversify. It appeared that was happening, but with this trade agreement the opportunity is lost. The bilateral trade agreements with Canada, Europe, and other countries will become waste paper because you have to import everything from the US. The Europe trade agreement is a better one. It was called mother of trade agreements by Piyush Goyal. If you are not going to import from other countries, why will they accept your exports?
We can’t believe Narendra Modi and his advisors don’t know this. What is the pressure on Modi?
Epstein files which have much more than what is made public so far? Adani case in US court? SOHO Sridhar Vembu’s case in US court? Anil Ambani? The sons and daughters of Ajit Doval, Jaishankar, Goyal, and other ministers who live abroad? MOSSAD? CIA?
People of the country are at a loss to know the truth.
(Also read Random Reflections dated 13 April 2025 here)
Thomas Franco is the former General Secretary of the All India Bank Officers’ Confederation and a Steering Committee Member at the Global Labour University.
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