Even as US President Donald Trump announced an immediate reduction in tariffs on Indian goods to 18%, think tank Global Trade Research Initiative (GTRI) has struck a cautious note on what the deal could mean for India. Following posts by Trump and PM Narendra Modi on social media, Ajay Srivastava, founder of GTRI, said: “Caution, not celebration, is warranted.”
Trump’s Truth Social post outlined several claims: India will stop buying Russian oil, step up purchases of US oil, may buy oil from Venezuela, reduce tariffs on US products to 0%, and spend $500 billion on US energy, technology, and other goods. None of these claims has been officially confirmed by India.
Critical Questions Remain Unanswered
GTRI notes that several important questions about the trade deal remain unclear. “Trump says US tariffs will fall from 25% to 18%. However, since the post also refers to India stopping Russian oil purchases—linked earlier to punitive tariffs—it is unclear whether the cut is actually from 50% to 18%, or whether Trump misstated the starting tariff level,” the think tank said.
Reports quote White House officials saying that the 25% tariff linked to Russian crude will also be removed. GTRI further points out that while the US has agreed to reciprocal tariffs with other countries — 10% for the UK, 15% for the EU and Japan, 19% for Indonesia and Malaysia, and 20% for Bangladesh and Vietnam — some levies on specific products will remain. Section 232 duties of 50% on steel, aluminium, copper, and similar goods will continue, along with a 25% tariff on select auto components. Zero-duty treatment, however, will remain for pharmaceuticals, aircraft, aircraft parts, and some mechanical and electronic items.
Long-Term Claims Require Scrutiny
Trump’s claim that India will eliminate both tariff and non-tariff barriers on American products does not clarify which goods are included. “India has previously resisted opening sensitive sectors such as food grains, genetically modified products, and other regulated imports,” GTRI said.
The $500 billion figure for US purchases also raises questions. “Reaching $500 billion would likely require more than 20 years, suggesting the figure refers to a long-term aspiration rather than a near-term commitment,” the think tank said. Srivastava added: “Trade deals are serious business. Until there is a joint statement, negotiated text, and clarity on enforceability, this should be treated as a political signal—not a concluded trade deal. Caution, not celebration, is warranted.”
What Modi told his NDA MPs
Prime Minister Narendra Modi on Tuesday told NDA MPs that India’s trade pact with the United States was shaped by patience and long-term thinking, even as the government faced criticism during tariff negotiations.
Speaking at the NDA Parliamentary Party meeting, where he was greeted with loud applause on arrival, Modi said the outcome had vindicated the government’s approach to global trade. He noted that the agreement had helped create a more supportive economic climate and underlined India’s growing confidence on the world stage.
Referring to earlier criticism over tariff-related decisions, the Prime Minister said the government chose to stay the course rather than react to short-term pressure. “People criticised the tariffs, but we remained patient, and the results are now visible,” he said.
Modi also spoke about broader shifts in the global economic and political order, suggesting that India is increasingly emerging as a key beneficiary. “The world order is changing, and its trajectory is increasingly tilting towards India. I have been saying this at various global platforms, and today we are seeing India benefit even amid trade tensions across many countries,” he added.
How BJP leader reacted
In a post on X, Goyal said the deal would give India greater access to advanced American technology and help speed up progress towards the goal of Viksit Bharat 2047. Congratulating Prime Minister Narendra Modi and US President Donald Trump, he described the agreement as a reflection of “the power of two like-minded, fair-trading democracies working together for shared prosperity.”
External Affairs Minister S Jaishankar, Defence Minister Rajnath Singh and Finance Minister Nirmala Sitharaman also welcomed the development, joining the Prime Minister in hailing the deal as a positive step for bilateral ties.
BJP MP Bansuri Swaraj said earlier on X that the tariff reduction would boost market access, generate employment and encourage innovation, adding that economic cooperation remains the “firm foundation” of the India–US strategic partnership.