The electoral setback is unlikely to change the broader direction of US trade policy, which is increasingly driven by economic nationalism, domestic manufacturing and efforts to strengthen supply chains, Srivastava said. Support for protective tariffs cuts across party lines, with Democrats also backing measures to protect domestic industries and union workers.
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“With foreign policy leverage failing against Russia, China, and Iran, Trump needs a quick win. Expect heightened pressure on India for a trade deal to prove American clout,” Srivastava said.
Trump is likely to continue relying on executive powers to pursue his trade agenda, including provisions under Section 232 and Section 301, executive orders, Treasury sanctions and US Trade Representative rules, to exert unilateral pressure on trading partners.
An unequal trade framework
The proposed India-US trade agreement differs significantly from the free trade agreements India has signed with other countries, particularly in its treatment of import duties.
Under conventional trade agreements, both countries reduce or eliminate their Most Favoured Nation (MFN) tariffs, the standard import duties applied to other World Trade Organization (WTO) members.Under the proposed India-US framework, however, Washington would retain its existing MFN tariffs, while New Delhi would be required to eliminate or reduce duties on most industrial goods and several agricultural products from the US.
The February 6 US-India Joint Statement also envisages India aligning its security and economic policies with Washington, committing to purchases worth $500 billion in American goods over five years and easing domestic regulatory oversight of US imports.
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The US, however, has offered no direct reciprocal concessions under the proposed arrangement. Instead, tariff threats, particularly those linked to India’s purchases of Russian crude oil under the Graham Act and Section 301 provisions, could be used to push New Delhi towards accepting the terms.
Even after signing the agreement, India could remain exposed to additional US tariffs of 15-18 percentage points over its regular MFN duties.
“The deal will essentially be economic coercion,” Srivastava said, arguing that the proposed framework offers Washington significant concessions without comparable commitments in return.
US loses key negotiating leverage
Washington’s approach follows its earlier strategy of using additional tariffs to extract concessions from major trading partners.
In April 2025, the White House imposed reciprocal tariffs through executive action and offered to reduce these additional duties, rather than standard MFN tariffs, to encourage countries such as Japan, the European Union, the United Kingdom, South Korea, Vietnam and Malaysia to negotiate trade agreements.
India followed a similar route, with the February 6 Joint Statement providing for a reduction in US reciprocal tariffs from 25% to 18%.
However, the US Supreme Court’s February 20 ruling in Learning Resources, Inc. v. Trump struck down the administration’s reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA), removing a key instrument Washington had used to secure trade concessions.
The ruling weakened the US negotiating position and prompted other countries to step back from pursuing agreements on similar terms. India remains the only country continuing negotiations under the proposed framework, Srivastava said.
He also questioned the rationale behind Washington’s pressure on India over Russian oil purchases, pointing to US imports of Russian-derived diesel and China’s substantial purchases of Russian crude.
WTO compliance concerns
The proposed agreement could also expose India to legal and diplomatic challenges at the WTO.
International trade policy and WTO expert Abhijit Das has warned that signing the proposed agreement would violate India’s commitments under the WTO’s MFN principle, which requires members to extend identical tariff treatment to all other members.
Under the current terms, India would grant preferential or duty-free access to most American exports without extending similar concessions to other trading partners.
Das has also questioned whether the arrangement would qualify as a legitimate free trade agreement under WTO rules, given that the US would not be reducing its own MFN tariffs in return.
By accepting such an asymmetric arrangement, India risks undermining its legal standing, credibility and negotiating power within the multilateral trading system.
New Delhi should not mistake relief from threatened tariffs for a balanced trade agreement, Srivastava argued. Opening its markets, committing to large purchases and restricting its policy choices could carry lasting costs, while any tariff relief offered by Washington could prove temporary.
India should instead insist on “clear, enforceable reciprocal concessions”, consistency with WTO rules and the freedom to protect its energy security and development priorities, he said.