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Why India's Caution on the US Trade Deal Is the Right Move
India is holding out on a U.S. trade deal after the Supreme Court invalidated reciprocal tariffs. A rushed agreement could lock in one-sided terms. The July 24 expiry of Section 122 tariffs is the next catalyst.
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The U.S. Trade Representative left New Delhi last month without an interim trade agreement. India has dug in on two demands: safeguards against future unilateral U.S. tariff actions, and market access that matches what rivals like Bangladesh and Vietnam get.
The Indian side is right to be skeptical. The February 6 joint statement that preceded the talks was a one-way street. India was expected to cut tariffs on most products. The U.S. offered only to reduce its Liberation Day retaliatory tariffs from 25% to 18% – tariffs that were illegal under WTO rules because they targeted specific countries. That concession lost its foundation when the U.S. Supreme Court struck down the reciprocal tariff regime on February 20.
India also agreed to buy $500 billion in U.S. goods and services. The U.S. made no reciprocal purchase commitment. Non-tariff barriers on U.S. farm produce, medical devices, and information technology goods were on the table. No equivalent U.S. concessions were offered. The goal was to cut the U.S. goods trade deficit with India, which stood at $58 billion in 2025. Services trade is roughly balanced.