US-India Trade Deal: Biggest Victory in Bilateral Ties in a Year, Says Analyst

He described the deal as a significant confidence-building measure after months of strained ties.

Speaking to ANI following the announcement, Kugelman said the agreement had been a long time coming, recalling that nearly a year had passed since US President Donald Trump hosted Prime Minister Narendra Modi at the White House and both leaders committed to pursuing a trade deal, adding that the relationship had faced multiple tensions in the months that followed.

Kugelman noted that the agreement would also help generate momentum to address other areas of friction in the bilateral relationship.

"My main reaction is it's been a long time coming. It's been almost a year since President Trump hosted Prime Minister Modi at the White House and they promised to pursue a trade deal. And of course, their relationship went sideways; it faced many tensions in the months that followed, and it became increasingly clear that it would be very difficult to get a trade deal, especially because many rounds of talks failed to yield positive outcomes," the analyst said.

"For there to be one now is really significant for sure, but it's also a major boost for the US-India relationship. This is the biggest victory for US-India relations in nearly a year. It'll be a big confidence-building measure, and I believe that it will bring some momentum that better enables us to work through tension points in various areas," he added.

At the same time, the analyst cautioned that many key aspects of the deal remain unclear.

He said there is limited information about the precise commitments made by both sides, particularly regarding energy imports and market access.

Kugelman noted that while India has reduced its imports of Russian oil in recent months, it is difficult to imagine a complete halt to such purchases, and that it remains unclear whether India has agreed to open politically sensitive sectors such as agriculture.

"We actually do not really know many key aspects of the deal. President Trump had indicated that India has essentially decided to stop doing a lot of things, which sounded a bit hard to believe. I find it hard to imagine that India will simply stop importing Russian oil. We have seen in recent months India decrease its imports of Russian oil, particularly after the new US sanctions on Russia went into play at the end of November. It's not a surprise that Trump said that India would import more American goods, but there are a number of other key issues we don't know. At this point, we don't know if India has agreed to open up access to politically sensitive sectors like its agricultural sector. That remains unclear," he said.

Kugelman further pointed out that questions remain over the fate of the additional 25 per cent tariff imposed by the US on India over Russian oil imports, beyond the reduction of the tariff rate to 18 per cent, stressing that a conclusive assessment of the deal would only be possible once greater clarity emerges on the concessions made by both sides.

"I think one of the biggest questions right now is what of the 25 per cent tariff the US slapped on India for imports of Russian oil? We don't know if that's going to be removed or not. We just know that the initial 25 per cent tariff will be brought down to 18 per cent. For me, one of the big questions is what the US side conceded. Has it given in to--has it made concessions to the Indian side? And that until we have a better sense as to what the terms of this deal are we need to refrain from giving a conclusive assessment of the deal," he added.

His remark comes after Trump, earlier on Monday, said that the US and India "have agreed to a trade deal" with Washington reducing the reciprocal tariff from 25 per cent to 18 per cent "out of friendship and respect" for PM Modi.

In his Truth Social post, Trump referred to his conversation with PM Modi earlier in the day, noting that the Prime Minister was one of his closest friends and a powerful, respected leader of India.

The US President also claimed that PM Modi had agreed to "stop buying Russian oil" and to buy much more from the US.

He further noted that India would reduce tariffs and non-tariff barriers against the US.

"It was an Honor to speak with Prime Minister Modi, of India, this morning. He is one of my greatest friends and, a Powerful and Respected Leader of his Country. We spoke about many things, including Trade, and ending the War with Russia and Ukraine. He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week! Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%. They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO," Trump's post read.

Following Trump's post, Prime Minister Narendra Modi, on X, said it was wonderful to speak with his "dear friend President Trump" and expressed delight that "Made in India products will now have a reduced tariff of 18%".

"Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement," PM Modi wrote in a post on X.

Meanwhile, a White House official confirmed to ANI that Washington will also drop the additional 25 per cent tariff on Indian imports imposed due to New Delhi's purchase of Russian oil, noting that India has to "cease, not just reduce, Russian oil purchases."

When asked by ANI whether the tariffs on Indian imports would be lifted in exchange for reducing Russian oil purchases, the official said, "Yes, although the agreement is that India will cease, not just reduce, Russian oil purchases."

- ANI