A long list of questions remained unanswered on Tuesday over the India-US trade agreement announced by President Donald Trump and confirmed by PM Narendra Modi, with both sides concerned over sharing details after Trump made some key claims in his Truth Social post.
The US side was relatively more forward, while “elaboration” and “papering” was still ongoing before the deal was actually signed.
Excerpts from the US Trade Representative
US Trade Representative Jamieson Greer said the deal would reduce India’s tariffs on US industrial goods from 13.5% to zero and eliminate tariffs, but allow India to maintain some agricultural import protections.
India’s Commerce Minister Piyush Goyal called the press and gave a 20-minute address, in which he praised the Modi-Trump “friendship” and promised benefits to “all 140 crore (1.4 billion) Indians”. He said the agreement would be finalized soon. News agency ANI quoted sources as saying that a joint statement could be issued within this week.
Read also | India-US trade deal being ‘papered’: Trump trade representative Jameson Greer echoes Goyal’s comments
Meanwhile, Greer said in an interview with CNBC that India’s tariffs “for a variety of things, you know, tree nuts, wine, spirits, fruits, vegetables, etc. – they’re going down to zero”. He did not specifically mention rice, beef, soybean, sugar or dairy, which are commodities that India has also kept out of its recent trade agreement with the EU, news agency Bloomberg said in its report.
That’s the extent of the expansion for now, but it only adds to the unanswered questions.
time and politics
Politically, this is a big step for Modi, coming on a day when opposition leader Rahul Gandhi moved the issue in Parliament. An unpublished book by former Indian Army Chief General MM Naravane, He said it would “expose the character of PM Modi and Defense Minister Rajnath Singh” on how they have handled the India-China border tensions.
Within hours of the uproar in the Lok Sabha on Monday over the issue, Trump’s announcement of the deal and tariff cuts took over the airwaves and the conversation.
This certainly signals a major move to reset broken relations with a tariff reduction deal from 50% to 18%Bringing relief to India’s economy. This includes eliminating punitive tariffs associated with purchases of Russian oil.
What has Modi agreed to?
On what Modi has agreed to in return, Trump said the Indian Prime Minister – “one of my best friends” – had agreed to buy $500 billion of American goods, cut tariffs on the US and stop buying crude oil from Russia, which is a key demand of the Americans.
Apart from the new tariff rate, PM Modi did not confirm details of the deal in his ex post following Trump’s on Monday.
Nevertheless, the agreed deal was praised by officials on both sides and cheered by investors.
Read also | Trump’s claims on India deal range from zero to $500 billion
“This is very good news for the US-India relationship,” former US ambassador to India Kenneth Juster said in an interview with Bloomberg TV on Tuesday. “This is the first phase of the agreement and if they continue to work on it, we could see further decline in the rate,” he said, adding that he is hopeful that it is long-term despite the way Trump has behaved towards India, swinging between expressions of love and blatant accusations of “financing the war in Ukraine”.
When Tariff Reaches 50%
Trump was reportedly upset that PM Modi did not agree with his claim that he had brokered a ceasefire between India and Pakistan in May 2025.
The full 50% US tariff rate imposed in August has hurt India’s labour-intensive industries, weakened its appeal as a manufacturing and export hub and soured diplomatic relations. India’s currency was the worst performer in Asia against the dollar last month, hit by concerns over the lack of a deal.
An unnamed official in Delhi told Bloomberg that the agreement to buy $500 billion worth of goods is a commitment over five years, though Trump did not specify any timeline. This could include the existing pipeline of projects, as well as new areas of spending, such as data centers, oil and other energy resources.
Russian oil, Venezuela, $500bn ‘commitment’
India has not responded directly to plans to halt Russian oil purchases, while Delhi’s long-time partner Moscow said it had no such information yet.
India currently imports less than $50 billion per year from the US, so increasing this to $500 billion would be challenging – flagged by Shashi Tharoor, MP from the Indian opposition Congress.
Top party leader Rahul Gandhi accused Modi “Selling the country under pressure”.
“What products are included, what is the timeline, and whether India has actually agreed to zero tariffs and zero non-tariff barriers, especially in sensitive sectors like agriculture and regulated imports – these remain unanswered,” said Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), a New Delhi-based think tank.
A major sticking point so far was India’s purchases of Russian oil, especially after Moscow’s invasion of Ukraine in 2022 increased trade flows and subsidized supplies became attractive.
In his post on Monday, the US President said Modi had agreed to buy more oil from the US and potentially Venezuela, which Washington runs after “seizing” its President Nicolas Maduro and “allowing” Vice President Delsey Rodriguez to take the chair.
Trump has also claimed that India will buy oil from Venezuela instead of America’s enemy Iran. Just last week PM Modi Spoke to Rodriguez from Venezuela. The Indian government said Modi and Rodriguez “agreed to further expand and deepen bilateral partnership across all sectors, including trade and investment, energy, digital technology, health, agriculture and people-to-people ties”.
There is nothing clear about whether India has fulfilled Trump’s wish on purchasing oil or not.
Piyush Goyal says this is the best deal in the sector
However, there are some clear positives for India, especially as Trump’s close ties with arch-rival Pakistan had also strained Delhi-Washington relations.
Piyush Goyal specifically said that India has “got it”Best deal in the area”, among his neighbours.
“The details are unclear, but topline, if both sides reduce tariffs meaningfully, as signaled on social media, it could open up real commercial opportunities,” Rick Rossow, senior adviser and chair of India and Emerging Asia economics at the Center for Strategic and International Studies, was quoted as saying.
Although India’s economy is not primarily export-led, the US is India’s largest market, accounting for about one-fifth of its exports.
At 18%, India’s tariff is now lower than Vietnam’s 20% rate and the 19% applicable to most of Southeast Asia.
This may promote manufacturing investment in India as an alternative center to China. GDP growth in the new fiscal year starting in April could now reach 7.4%, up from estimates of 6.8%-7.2%, a senior Indian bureaucrat told Bloomberg on Tuesday.
V Ananth Nageswaran, India’s chief economic adviser, said in an interview that the “China-plus-one” process of wooing exporters to India was “being hampered a bit because of these tariff uncertainties”.
Then there are other sectors beyond trade that are opening up because of the cold. Analysts said the deal could give “new impetus” to the Quad, a grouping of the US, Japan, India and Australia that aims to counter China’s growing influence.
Surprise after months of ups and downs
Signs of a thaw between the two economies emerged after Trump called Modi on his birthday in September. But no one was sure, as he later threatened to impose higher tariffs on India buying oil from Iran.
Talks for a deal have been ongoing since Trump returned to power early last year but there have been no signs recently that an agreement is on the way. US Trade Representative Greer said last week that although India has made “a lot of progress” in curbing Russian oil purchases, “they still have a way to go”.
Certainly, progress has accelerated following the arrival of Sergio Gore as US ambassador last month. A Trump family confidant, he wrote on Twitter on Monday after Trump’s announcement that relations between the US and India have “unlimited potential” – deploying all-caps like his boss.
Piyush Goyal said on Tuesday that in the deal, Delhi has given protection to sensitive sectors like agriculture and dairy. This came after US Agriculture Secretary Brooke Rollins said that the agreement will allow more US agricultural products to be sent to India. Neither party shared additional details.
The US deal comes just days after India secured the deal Historic agreement with the European Union, Bringing the number of trade agreements signed by New Delhi to five by May 2025.
India was one of the first countries to begin trade talks with the Trump administration last year, but relations soured after the US President repeatedly claimed credit for the ceasefire between India and Pakistan, while tariffs further soured ties. This is certainly a thing of the past, but the outline of the deal has given rise to new questions for Narendra Modi domestically.
