Despite all the fanfare and furore in Parliament, it may be premature to celebrate or criticise the India-United States Bilateral Trade Agreement, simply because it has not yet been forged. Yet, last week’s announcement of a “Framework for an Interim Agreement on reciprocal trade” (where the agreement itself is expected to be announced in the next few weeks), follows a procedure and a path that should be disquieting for all. While the baseline objective for the Narendra Modi government must be to enhance the Indian economy, and ease the unbearable burden that the U.S. Trump administration had imposed on it through 50% tariffs, the question it must ask is this: how, and at what cost? The Indian government must consider if this will be the template for all other India-U.S. agreements, strategic, economic or defence in the future.

America’s unilateral announcements

Every announcement on the deal thus far has been made by Washington unilaterally, with New Delhi racing to play catch-up. The first sign that the two countries had agreed on going ahead with negotiations that began in February 2025 came from a social media post by U.S. President Donald Trump on February 2, 2026. In it, he furnished several details of his conversation with Prime Minister Narendra Modi, all of which were incorporated into the Joint Statement and Executive Orders issued on February 6, 2026 — claims that Mr. Modi agreed to stop buying Russian oil, and to buy “much more” oil from the U.S.; that India would reduce tariffs and non-tariff barriers against the U.S. to “Zero” in return for 18% U.S. tariffs on Indian goods, and that Mr. Modi committed to “buy American” products to the tune of $500 billion.

Mr. Modi’s post that followed only divulged that the U.S. tariffs would be reduced. Four days later (U.S. time, 4 a.m.), Washington released the joint statement and two executive orders, on Russia and Iran, and subsequently a “Fact Sheet”. The Press Information Bureau released the joint statement a few hours later. The government has since refused to engage with the other documents in its public comments. But the entire manner of bringing out a “joint statement” unilaterally, begs this question. Who is calling the shots?

The nuts and bolts of the eventual trade regime being discussed, which includes tariffs, non-tariff barriers and market access can be considered at a later date when India and the U.S. actually sign the “interim agreement” on trade, as they are expected to next month. However, the concessions given in order to secure the interim agreement are set out clearly, and are a major cause for concern. While the Ministry of External Affairs and Commerce and Industries Ministry have sought to separate the trade agreement from Mr. Trump’s Executive Orders pertaining to Russian oil, they are in fact part of the same raft. Mr. Trump’s Truth Social post, the documents released on February 6, and the White House Fact Sheet issued on February 10 all present them together.

The U.S. makes it clear that it rescinded 25% punitive tariffs on India (imposed in August 2025), under three understandings: that India would stop buying Russian oil; that it had already begun to do so, and that the U.S. would impose tariffs again if India were to resume Russian oil supplies. Mr. Trump has even set up a panel of his top officials to monitor India’s oil intake. What is perhaps even more surprising is that the order states that India has agreed to “align sufficiently with the United States on national security, foreign policy, and economic matters”.

The Indian government has not so far denied any of these claims, instead issuing long statements outlining India’s energy sourcing priorities and the need to diversify its supply sources On the ground, the trends are clear: India’s imports of Russian oil have been reducing since November 2025, and oil purchases in December 2025 crashed to 38-month lows. From 40% of its oil intake in 2024, Russia now accounts for 25%.

Contrary to External Affairs Minister S. Jaishankar’s assertion that India would put cheap oil for its consumers at the highest priority, and his Ministry’s characterisation of the U.S.’s punitive tariffs as “unfair, unjustified and unreasonable”, India is now buying less Russian oil, just as the discounts on it get larger. Other concessions, such as the zeroing of tariffs in several sectors, and the promise to buy American goods worth $500 billion require further scrutiny. Buying U.S. goods in such large volumes would leave limited space for imports from other trading partners, and offering Washington terms not extended to countries that have only recently concluded trade agreements with India. These include the European Union, the European Free Trade Association, and New Zealand and would likely prompt questions from them.

Needless to say, the developing world, or the Global South, that once cheered India’s refusal to back down in the face of non-United Nations, unilateral sanctions, will be watching closely. As a result, understanding the U.S. deal’s impact on India’s diplomatic standing among other nations is also vital.

A pattern of U.S. demands

Should India accept the U.S.’s ultimatums to halt Russian oil imports, it would mirror its 2019 approach of compliance on giving up Iranian and Venezuelan oil — resisting at first before ultimately yielding to U.S. pressure months later. The U.S. is now pushing for India to buy American and American-controlled Venezuelan oil, for India to give up the Chabahar port project and all trade with Iran.

If New Delhi agrees to all these, it will not only lose respect and goodwill with the countries in question (where India had promised to increase trade and investment) but also its credibility as a buyer and supplier in the market worldwide. This could prove particularly awkward for India as it prepares to host this year’s BRICS summit, with the leaders of Russia, Iran and other developing-world partners expected to attend.

The next question New Delhi must ask itself is this. If the only way to do business with the U.S. involves the acceptance of “unfair, unjustified and unreasonable” measures such as tariffs, then what does this mean for strategic relations with the U.S.? Will every agreement on strategic ties, including on defence deals, military alignment, the Quad (India, Australia, Japan, the U.S.) and the Indo-Pacific, counter-terrorism and India’s neighbourhood follow this pattern? Not only have the U.S.’s deals with Pakistan and Bangladesh underscored Washington’s limited regard for India’s interests in the neighbourhood, but its insistence that India end Russian oil imports, curtail trade with Iran, and halt development of Chabahar would only further benefit China. It is worth noting that India is the only country that the U.S. imposed 25% punitive tariffs for Russian oil on, while China and Türkiye are among other major buyers. In 2022, Mr. Modi’s refusal to criticise Russia for the invasion of Ukraine publicly was seen as a compulsion of India’s ties with Russia — abandoning its principles of territorial integrity in favour of pragmatism. In 2026, giving up Russian oil as a compulsion of India’s ties with the U.S. is neither principled, nor pragmatic.

India-U.S. trade deal: Piyush Goyal rejects claims India yielded to U.S. demands

On India’s standing

Finally, the repercussions of this deal could inflict the greatest damage on India’s principles of strategic autonomy, multi-alignment and multipolarity, as it would narrow India’s options rather than diversify them — not just in energy procurement, trade, and connectivity but also in its broader global relationships. In 2019, Mr. Modi announced that India had rejected the Regional Comprehensive Economic Partnership (RCEP), invoking “Mahatma Gandhi’s talisman test”, walking out of a deal that his government had worked on for five years, citing discomfiture with Chinese economic domination. Confronted with an agreement that makes far more egregious demands on India’s sovereign choices, it would be surprising if the government did not subject the U.S. deal to additional scrutiny before finalising it.

Published - February 14, 2026 12:16 am IST