Caution, not celebration: GTRI on India-US trade deal

India-US trade deal: Even as US President Donald Trump has announced an immediate reduction in tariff rate on India to 18%, think tank Global Trade Research Initiative (GTRI) has struck a cautious note on what the deal could mean for India.

In a note post post Trump and PM Narendra Modi’s posts on social media platforms, Ajay Srivastava, founder of GTRI said: Caution, not celebration, is warranted.




Trump’s Truth Social post on the trade deal made several claims; India will stop buying Russian oil, India will step up purchase of US oil, India may buy oil from Venezuela, India has agreed to reduce tariff on US products to 0%, India has agreed to spend $500 billion on US energy, technology etc. None of these claims has been officially confirmed by India.

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India-US Trade Deal: Critical Questions Unanswered

GTRI says that several important questions related to the India-US trade deal remain unanswered. ”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,” says GTRI.

Reports quote White House officials saying that the 25% tariff linked to Russian crude will also be removed.

The US has already agreed to reciprocal tariff rates of 10% for the UK, 15% for the EU and Japan, 19% for Indonesia and Malaysia, and 20% for Bangladesh and Vietnam under trade agreements concluded between May and October 2025, GTRI notes.

Additionally, even after the India-US deal, certain levies will remain unchanged. Section 232 duties of 50% on steel, aluminium, copper and similar products will continue, as will a 25% tariff on select auto components. At the same time, zero-duty treatment will remain in place for pharmaceuticals, aircraft and aircraft parts, as well as some mechanical and electronic items.

Trump has claimed that India will eliminate both tariff and non-tariff barriers on American products, but his remarks do not clarify the scope of goods covered by this pledge.

“India has previously resisted opening sensitive sectors such as food grains, genetically modified products, and other regulated imports,” says GTRI.

Trump has also claimed that India will purchase more than $500 billion worth of US goods. Currently, India’s yearly imports of merchandise and energy from the US are below $50 billion.

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“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,” GTRI adds.

According to Ajay Srivastava, India should resist the temptation to celebrate President Trump’s trade announcement prematurely.

“The headline figure of $500 billion in US purchases also lacks credibility without a timeframe. India’s current annual imports from the US are under $50 billion, suggesting this is, at best, a long-term aspiration rather than a binding obligation,” he says.

“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,” he concludes.