Beyond the Cheer, Interrogating the Concessions in the India-US Trade Deal

Beyond the Cheer, Interrogating the Concessions in the India-US Trade Deal

The announcement of the India-US trade deal, with its headline promise of slashing reciprocal tariffs from 25% to 18%, has been met with palpable relief and optimism in New Delhi and export hubs across the country. For beleaguered sectors like textiles, leather, and gems & jewellery, the agreement offers a lifeline, restoring competitiveness in the world’s largest consumer market and securing millions of jobs. However, as international trade expert Abhijit Das astutely warns in his analysis, this celebratory moment must be tempered with rigorous scrutiny. The deal’s true cost to India’s economic sovereignty, regulatory autonomy, and strategic flexibility remains hidden within the trade-offs and concessions exchanged away from the limelight. President Trump’s triumphant listing of Indian concessions—zero tariffs on US goods, massive energy purchases, and a pivot away from Russian oil—points to a complex bargain whose fine print demands urgent, sober examination.

The Stated Concessions: A Preliminary Accounting

While India has been characteristically circumspect in confirming details, President Trump’s public pronouncements outline a significant Indian give. The three key concessions, as highlighted by Das, are:

1. Zero Tariff and Non-Tariff Barrier Regime: India agreeing to reduce tariffs and non-tariff barriers on US goods to zero represents a monumental opening of its market. This goes beyond mere tariff reduction to a near-total elimination of standard protective instruments for domestic industries.

2. Massive Purchase Commitments: The pledge to purchase over $500 billion worth of US energy, agricultural, technological, and other products is a staggering figure. It implies a long-term, legally binding commitment to redirect a substantial portion of India’s import basket towards the United States, effectively locking in demand for American exporters.

3. Strategic Energy Realignment: Agreeing to “stop buying Russian oil” and instead source more from the US (and potentially Venezuela) is not merely a commercial shift but a profound geopolitical concession. It directly aligns India’s energy security policy with US foreign policy objectives, marking a departure from India’s traditionally mercantile and multi-vector energy diplomacy.

These stated concessions alone suggest a deal of unprecedented depth. However, the devil, as always, resides in the details of the final legal text. Das’s framework of six critical questions provides a essential roadmap for evaluating the deal’s full implications.

The Six Pillars of Scrutiny: Unpacking the Hidden Costs

1. Agriculture: Protecting the Farmer’s Livelihood
The promise of zero tariffs on US agricultural imports raises immediate red flags for India’s vast and vulnerable farm sector. The crucial questions are which products and under what conditions. If India has agreed to tariff-rate quotas (TRQs) for sensitive items like dairy, apples, cotton, maize, or soybeans, the size of those quotas relative to domestic consumption is paramount. A large quota could flood the market with cheaper, subsidized US produce, destabilizing prices and crippling Indian farmers. The statement by US Agriculture Secretary Brooke Rollins about accessing India’s “massive market” underscores this aggressive intent. Furthermore, the absence of a negotiated floor price for in-quota imports could leave Indian farmers defenseless against predatory pricing. This concession risks sacrificing the livelihoods of millions at the altar of a broader strategic bargain.

2. The GM Dilemma: Sovereignty Over the Food Chain
The US has long pressured India to ease its restrictive and cautious regulatory regime for Genetically Modified (GM) crops and food products. A concession here would be particularly insidious. Would the deal force India to adopt a “predictable” (read: permissive) regulatory framework, stripping its agencies of the right to make independent, science-based, and precautionary assessments on a case-by-case basis? Such a move would not only impact farmer choice and biodiversity but also consumer right to know and safety, handing over control of a critical part of the food chain to US agribusiness giants.

3. Sanitary and Phytosanitary (SPS) Measures: Eroding Domestic Standards
Perhaps one of the most technically complex yet devastating concessions could lie in the realm of SPS measures. If India commits to accepting US health certificates for dairy, meat, and poultry imports as sufficient, it would effectively subordinate its own domestic food safety and animal health standards to those of another country. As Das notes, this was a key feature of the Malaysia-US deal. It implies a loss of regulatory sovereignty, where concerns about hormone-treated dairy or specific poultry farming practices could be overridden by a foreign certificate, putting domestic consumers and producers at potential risk.

4. Pharmaceuticals and Public Health: The Evergreening Threat
India’s role as the “pharmacy of the developing world” rests on its robust patent law, particularly Section 3(d) of the Patents Act, which prevents the “evergreening” of patents (minor tweaks to extend monopolies). US trade deals routinely target such provisions. Concessions related to patentability criteria or “patent linkage” (tying marketing approval for generics to the patent status) could severely erode the generic pharmaceutical industry. This would have a direct, adverse impact on access to affordable medicines not just for India, but for the entire Global South that depends on Indian generics. The cost of this concession would be measured in human health and lives, not just dollars.

5. The Digital Domain: Taxing Rights and Data Sovereignty
The digital economy is the new frontier of trade conflict. Concessions here could cripple India’s fiscal and strategic autonomy. Key questions include:

• Customs Duties on Electronic Transmissions: Would India be forced to abandon its principled stand at the WTO and agree to a permanent moratorium, forever forgoing potential tax revenue from digital imports?

• Digital Services Tax: Would the deal permanently prohibit India from imposing taxes like the Equalization Levy on digital giants, denying it a fair share of revenue from value created in its market?

• Data Governance: Does the deal include commitments on free cross-border data flows and restrict data localization? This could undermine India’s ability to protect citizen privacy, foster domestic digital industries (like cloud services), and regulate data for national security.

6. Strategic Alignment: The Shadow of Extraterritoriality
Most alarmingly, as Das points out, recent US trade deals contain clauses that effectively align the partner’s foreign and trade policy with US interests. We must ask:

• Digital Policy Veto: Would India need US consultation before signing digital trade pacts with other countries (e.g., the EU or UK)?

• Enforcement of US Sanctions: Has India agreed to cooperate in restricting its nationals and companies from dealing with third-country entities sanctioned by the US (a form of enforcing US sanctions extraterritorially)?

• Mirroring Trade Actions: Must India automatically impose equivalent trade restrictions on any country targeted by US tariffs?

Such provisions would represent a profound erosion of India’s strategic autonomy, transforming a trade partner into a policy vassal.

Systemic Implications: Undermining the WTO and the Rules-Based Order

Beyond bilateral costs, the deal carries a heavy systemic price. By accepting the 18% “reciprocal tariff”—a construct the US applies unilaterally and which Das rightly notes violates its WTO commitments—India legitimizes a protectionist, power-based tool. It joins a list of countries whose bilateral pacts with the US are incrementally dismantling the core WTO principle of Most-Favored-Nation (MFN) treatment, where trade advantages are extended to all members equally. This accelerates the fragmentation of global trade into rival blocs, replacing a rules-based multilateral system with a might-makes-right paradigm of “power play.” India, which has historically championed the multilateral system, now finds itself complicit in its erosion for short-term gain.

The Sword of Damocles: Predictability and Trumpian Uncertainty

Finally, Das delivers the most sobering caveat: any predictability from this deal is entirely contingent on the whims of one man. The relief is conditional “only as long as Trump does not impose additional illegal tariffs on India in future for any of its actions that he might perceive to be against US interests.” The past four years have shown that such perceptions can be capricious and wide-ranging. The deal, therefore, does not provide a stable foundation; it merely purchases a temporary truce that can be revoked at any moment, leaving Indian exporters vulnerable once again and rendering any painful concessions made in return as sunk costs.

Conclusion: A Necessary but Opaque Bargain

The India-US trade deal is a classic geopolitical bargain: immediate economic relief traded for long-term strategic and regulatory concessions. The cheer for exporters is real and justified, but it cannot be the end of the public discourse.

The Indian government and Parliament have a solemn duty to subject the final text of this agreement to forensic scrutiny. The questions raised by Abhijit Das must be answered transparently. What is the exact quantum of market access granted to US agriculture? What safeguards protect Indian farmers? How is the integrity of India’s patent law and digital taxation rights preserved? To what extent has foreign policy autonomy been bartered away?

The deal may be a necessary geopolitical maneuver in an era of great power competition, where aligning with the US against China offers its own strategic dividends. However, a democracy must know the precise price it is paying. The goal should not be to reject the deal outright, but to ensure that its costs are fully understood, mitigated where possible, and deemed acceptable in light of the broader national interest. The 18% tariff is a welcome number, but the hidden concessions attached to it will define India’s economic and strategic trajectory for decades to come. The celebration must now give way to vigilant, informed, and unflinching examination.

Q&A: Scrutinizing the Concessions in the India-US Trade Deal

Q1: Beyond the tariff reduction, what are the three major concessions that President Trump has claimed India made in the deal?
A1: According to President Trump’s statements, the three major Indian concessions are:

1. Zero-Duty Access: Reducing tariffs and non-tariff barriers on US goods to zero.

2. Massive Purchase Commitment: Agreeing to buy over $500 billion worth of US energy, technology, agricultural, coal, and other products.

3. Strategic Energy Pivot: Stopping purchases of Russian oil and buying more energy from the US (and potentially Venezuela) instead.

Q2: Why is the concession on agriculture considered particularly sensitive for India, and what specific details need scrutiny?
A2: Agriculture is sensitive because it involves the livelihoods of millions of vulnerable Indian farmers. The key details requiring scrutiny are:

• Which Products? Identifying the specific agricultural goods (e.g., dairy, apples, cotton) subject to zero tariffs or tariff-rate quotas.

• Quota Size: The volume of allowed imports relative to India’s domestic consumption, which could determine market flooding.

• Floor Prices: Whether a minimum import price was negotiated to protect against predatory pricing from subsidized US produce. The absence of these safeguards could devastate local farm economies.

Q3: How could concessions in the deal potentially impact India’s pharmaceutical industry and public health?
A3: Concessions could target India’s patent law, particularly provisions that prevent “evergreening” (extending patents via minor modifications). If the deal forces changes to India’s patentability criteria or introduces “patent linkage” (tying drug marketing approval to patent status), it would strengthen monopolies for US pharmaceutical companies. This would erode India’s generic drug industry, reducing the production of affordable medicines and severely impacting access to healthcare both in India and across the developing world that relies on Indian generics.

Q4: What are the potential threats to India’s digital economy and sovereignty embedded in the deal’s fine print?
A4: Threats to the digital domain could be threefold:

1. Fiscal Sovereignty: Concessions may prohibit India from imposing customs duties on electronic transmissions or a digital services tax (like the Equalization Levy), depriving it of vital revenue from the digital economy.

2. Data Sovereignty: Commitments on free cross-border data flows could restrict India’s ability to mandate data localization, undermining its capacity to protect citizen privacy, secure national security data, and nurture domestic digital/cloud industries.

3. Regulatory Autonomy: The deal may limit India’s ability to set its own rules for the digital marketplace.

Q5: Why does the expert, Abhijit Das, argue that the predictability of the deal is fragile, and what broader systemic harm does it cause?
A5: Das argues predictability is fragile because the 18% tariff relief exists only “as long as Trump does not impose additional illegal tariffs” based on his personal perception of US interests. This creates permanent uncertainty. Systemically, the deal harms the global trading order by legitimizing the US’s “reciprocal tariff”—a unilateral, WTO-violating tool. By accepting it, India undermines the core Most-Favored-Nation (MFN) principle of the World Trade Organization, encouraging a shift from a rules-based multilateral system to a power-based, fragmented system of rival trade blocs.