President Donald John Trump, on February 2, 2026, announced a trade deal with India that slashed US tariffs on Indian goods to 18% from 50% in exchange for New Delhi halting Russian oil purchases and lowering trade barriers. The development may seem a positive one for the South Asian nation at first glance. However, experts have dismissed the reduced 18% tariffs as a nothingburger, citing the pre-Trump era levies which were minimal at about 3-4% on Indian goods exports. The reality is that the pre-Trump US is all about the past and the present has little connection to it. The question arises here: How did India achieve the reduction of tariffs on its exports to the US from 50% to 18%?

It is noteworthy that Indians currently get various information about foreign policy of their country from President Trump’s Truth Social, and the strategic interim trade deal negotiated recently between Prime Minister Narendra Modi and the US President is no exception. The Government of India is yet to issue a detailed statement on the agreement or discuss the issue in the Parliament.

Piyush Vedprakash Goyal, the Indian Minister of Commerce and Industry, has emphasised that ensuring energy security for India’s 1.4 billion people is the “supreme priority” of the Modi Administration, stressing: “Given the changing global circumstances, diversifying of energy sources is part of this strategy. We, and not only us, but all specialists in the field of international energy affairs, are well aware that Russia is not the only supplier of oil and petroleum products to India.“

Irrespective of the minister’s stand on the strategic interim trade deal between India and the US, the important question is: Why did this sense of propriety arise only after bowing to US pressure? In a rare first, India has displayed “immense weakness” in trade diplomacy as its action contrasts with reports showing record-high trade performances in 2024-25. The message India has sent to the global community through this action is terrifying: It is not at all difficult to prompt New Delhi to surrender.

India’s decision to reduce oil purchases from Russia is not the only sign of surrender. Earlier, President Trump expressed serious concern over the Indo-US trade deficit, with 2024 data showing US imports from India (worth nearly USD 87 billion) far exceeding exports to India (worth about USD 41 billion). Experts believe that the significant imbalance fuelled demands for reciprocal, or fair, trade, leading to the interim agreement reducing US tariffs on Indian goods to 18% while requiring India to lower duties on American products.

According to the Commerce and Industry Ministry, India’s goods trade surplus with the US almost halved, falling from USD 3.17 billion in April 2025 to USD 1.73 billion in November 2025. This narrowing of the trade gap is attributed to increased imports from the US as part of shifting trade dynamics. Based on trade data for 2025, the imposition of a 50% tariff on Indian imports by the US (in phases, finalised in late August) significantly disrupted Indian exports to the US. However, it did not immediately cause a collapse in total trade and US imports into the Indian market actually increased in certain sectors because of the changing energy and trade dynamics. However, Indian exports to the US in labour-intensive sectors, including textiles, leather goods, gems and jewellery, and marine products, were severely impacted by 50% tariffs imposed in August 2025, leading to a 28.5% drop in overall exports between May and October 2025. Interestingly, the US has safeguarded its own (trade) interests by creating troubles for India.

Petroleum imports from the US to India, too, have risen significantly, with crude oil imports increasing by 92% between April and November 2025 to nearly 13 million tonnes. With this, the US share of India’s crude imports rose to 8.1% during this period, up from 4.6% the previous year. At the same time, India’s crude oil imports from Russia declined, with its share dropping from 37.88% in April-October 2024 to 32.18% in the corresponding period of 2025. In other words, India’s claims about its right to independent decision-making in trade are hollow.

As per the 2026 Indo-US trade deal, the Modi Administration has agreed to adopt a calibrated approach to open its agricultural sector, reducing tariffs on specific products, like tree nuts, fruits and animal feed, while protecting sensitive sectors. This strategic, phased opening aims to lower costs for domestic food processing and poultry industries, benefiting from imports. However, the magnitude of the protests against this decision by the Government of India in different parts of the country signifies deep-seated fears regarding financial viability and the future of the Indian farmers. New Delhi needs to consider the acceptability of liberal economics in agriculture and to determine its domestic policy accordingly.

Political analysts have warned that India would have to pay a heavy price in the coming days for surrendering to US pressure.

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Published by Koushik Das

Koushik Das (born on May 16, 1976 in Kolkata) is a career journalist. Based in the Indian capital of New Delhi, Koushik writes mainly about foreign policies and current geopolitical issues, and rarely about other topics. His own political ideas are highly influenced by Antonio Gramsci, Louis Althusser, Michel Foucault, Michael Oakeshott and others. English philosopher and political theorist Oakeshott (Dec 11, 1901-Dec 19, 1990) says that “in political activity, men sail a boundless and bottomless sea. There is neither harbour for shelter nor floor for anchorage, neither starting-place, nor appointed destination. But we have to keep afloat”. (Rationalism in Politics, 1962) As a student of Political Science, Koushik loves to share his views on issues, which have great impacts on his thought process (and also on India, South Asia and of course on the global community), with his readers through his website – Boundless Ocean of Politics. By doing so, he tries to keep himself afloat. You will find some of his articles in https://inserbia.info/today/ (https://inserbia.info/today/author/kou_das13_i/), as he has been trying to assess the global geopolitics since 2003. You can also mail him at kousdas@gmail.com View all posts by Koushik Das