Many questions on the recent trade deal between India and America are still unresolved. This agreement came to light after the phone conversation between US President Donald Trump and Prime Minister Narendra Modi, in which America reduced the tariff on goods coming from India to 18 percent. Trump described it as immediately effective and said that it would help in ending the Ukraine war. Trump is calling it the ‘Father of all deals’. In his response, PM Modi expressed happiness over the tariff being reduced by only 18 percent and said that people will benefit from the cooperation between the two big economies, but did not mention Trump’s other claims. This raises 5 big questions…
Question 1: Where is the US-India trade agreement?
answer: Trump called it a trade deal, but did not say whether it was just a tariff cut or the first tranche of a free trade agreement started after PM Modi’s 2025 US visit. Trump’s mood changed overnight and he reduced the tariff on India. Overall, he remembered PM Modi’s friendship and praised him. However, this agreement should have included issues like tariffs, non-tariff barriers, market access and investment, but both the governments did not provide any information about it. Contrary to the agreement with the European Union (EU), complete information was not given here. There is also no clarity on market access in agricultural sectors such as soybean and dairy, where India has been hesitant to open up.
Question 2: Will 18 percent tariff address India’s regional disparity?
answer: The 25 percent tariff imposed in April 2025 was higher than Bangladesh and Vietnam (20 percent), Pakistan (19 percent). The new 18 percent is better, but neighboring countries get a rebate of 5 percent under GSP, due to which India is still at a loss. Challenges still remain in the exporting sectors.
Question 3: What will happen to Russian oil imports?
answer: Trump said that PM Modi agreed to stop Russian oil and buy more oil from Venezuela, but the Foreign Ministry did not comment on this. The government has always said that oil purchase is commercial and market based. This is necessary for energy security. In August 2026, the Foreign Ministry had termed the US penalty tariff on Russian oil as unfair. Recent data shows that Russian oil imports are already falling, such as a 38 percent decline in October and a recent 29 percent decline, but there is no official confirmation of a complete stoppage.
Question 4: Is India succumbing to US sanctions?
answer: This raises questions about India’s independence in energy purchasing. In 2019, after pressure from Trump, oil purchases from Iran and Venezuela came to zero. Recently, there is a possibility of change in the case of Venezuela, but the threat of 25 percent tariff on Iran and withdrawal of exemption on Chabahar port may affect India. There is no allocation in the budget for Chabahar, which may indicate a retreat from the 23-year-old project.
Question 5: How much investment has India promised to invest in America?
answer: Trump claimed purchases worth more than $500 billion, but the State Department declined to comment. This data may be spread over many years and regions. At present the bilateral trade between the two countries is 131 billion dollars and India’s investment in America is about 40 billion dollars, hence such a big promise needs to be confirmed.
