US trade pact proposal more like one-sided market access: Ashwani Mahajan

Ashwani Mahajan says the proposed India-US trade pact has become a one-sided market access arrangement, with key differences persisting over agriculture, data and Russian oil

Ashwani Mahajan, former professor of economics at Delhi University’s PGDAV College and the national co-convenor of Swadeshi Jagran Manch (the economic think tank of the Rashtriya Swayamsevak Sangh), tells Archis Mohan in a telephonic interview from New Delhi as to why the US delegation to India returned “empty-handed”. He also speaks about the White House’s inability to understand India’s political economy, and how the government stood up to Washington in its record purchases of Russian crude. Edited excerpts:

 

What is your assessment of where the India-US trade deal stands today? 

The scenario has changed in the last few months. In fact, it changed within less than two weeks after India and the US signed the framework bilateral trade agreement in February, when the US Supreme Court declared the arbitrary tariffs (reciprocal tariffs) imposed by President Donald Trump unconstitutional. Consequently, the consensus reached on the trade framework between the two nations has lost its significance.

 

When the interim framework for a trade agreement was signed in February, the US had imposed high reciprocal tariffs on imports from several countries. Under the framework, the tariff burden on India was expected to drop to around 18 per cent, whereas many competing nations would have faced relatively higher tariffs. This would have granted Indian exporters a significant competitive advantage in the US market. Therefore, renegotiation has become essential.

 

This argument carries considerable weight. It raises a question for India: how can one rely on benefits that the US can no longer guarantee? From India’s perspective, the proposed trade agreement now appears more like a one-sided market-access arrangement rather than a balanced trade deal. This is why Commerce Minister Piyush Goyal has said that while the India-US trade agreement is nearly ready, it cannot be signed unless India secures a competitive advantage over other nations.

 

As a result, the economic rationale behind the February framework has fundamentally shifted. The assumptions upon which the framework was built no longer hold true. Therefore, unless the terms are renegotiated to reflect the changed circumstances, the previous interim framework can be considered largely obsolete, as it fails to deliver the expected special benefits to India.

 

US Trade Representative (USTR) Jamieson Greer visited New Delhi from June 22 to 24 to finalise the trade deal. What was achieved in these negotiations? 

For quite some time now, negotiators from both the US and India have maintained that the bilateral trade agreement between the two nations is nearing finalisation. Yet, it appears that an impasse persists. My understanding is that the USTR returned to the US empty-handed.

 

Following the signing of that framework, statements from the US administration created significant confusion, as they contradicted India’s stated position. The US administration made several statements that were not part of the framework at all. Opposition parties and a section of the media capitalised on this situation to put the government in the dock.

 

A primary point of contention was the US side’s repeated claim that India had promised not to purchase oil from Russia — an issue that was not even mentioned in the framework. Furthermore, the US side claimed India had committed to purchasing goods and services worth $500 billion from the US over the next five years, whereas the framework had merely expressed an intention to make such purchases. The word used in the framework was "intent", and there is a difference between intent and commitment.

 

Additionally, the US side raised issues regarding agricultural imports that went beyond the scope of the framework agreement. Naturally, while it was not always appropriate for the Indian government to refute every claim, even when false, given diplomatic sensitivities, it did reiterate its stance from time to time. Nevertheless, these issues led to unwarranted criticism of the government in the Indian media, with allegations that it was capitulating to the US at the expense of India's national interest.

 

What are the red lines that remain? 

Despite the framework agreement of February, several issues remain unresolved. Obviously, a major red line is access to agricultural markets, dairy imports, tariff reductions on automobiles and industrial goods, digital trade and data governance, intellectual property concerns, rules of origin, and issues regarding the movement of professionals and visas. There is also the issue of India’s purchase of Russian oil, and a few more red lines may emerge in the near future.

 

The US seeks tariff reductions from India on automobiles, agricultural products, dairy items, medical devices, and alcohol. India remains firm against lowering these tariffs for two reasons: the livelihoods of people in the agriculture and dairy sectors, and strategic industrial development.

 

In agriculture, some issues were definitely addressed in the framework as written, but the reality lay in the details. At the time, the US administration was talking about pulses, which were not included in the framework, and subsequently it had to withdraw those claims.

 

Regarding dairy, a specific issue involves the practice of feeding animal-derived feed to livestock—often referred to as "non-vegetarian milk"—which India cannot accept due to cultural and religious reasons.

 

Digital trade and data-related regulations are also significant stumbling blocks in the agreement. India views data as a strategic resource and is unwilling to compromise its future policy-making sovereignty, whereas the US opposes data localisation efforts and advocates the free cross-border flow of data. It is worth considering whether India, poised to become a future digital superpower, can agree to such terms.

 

The US seeks stronger patent protections to benefit its pharmaceutical and technology industries, while India aims to ensure the continued availability of affordable medicines and maintain flexibility within patent laws to foster the growth of its own technology sector.

 

Furthermore, the US administration has been consistently tightening its visa and immigration laws, sparking significant resentment not only within the Indian government but also among the general public. Yet, the draft trade agreement made no mention whatsoever of these issues.

 

How can the government give up political capital on dairy, agriculture, intellectual property rights, and the purchase of Russian oil, which has earned it goodwill by demonstrating that India continues to buy oil from Russia despite pressure from powerful countries? In fact, there was too much noise in the media suggesting that India had come under pressure from the US on the issue of Russian oil. According to my information — and the data is in the public domain — India has purchased more oil from Russia in the first five and a half months of this year than during the same period in 2025.

 

India’s purchases of Russian crude oil have averaged over 2.55 million barrels per day (bpd) in June, accounting for nearly half of India's total crude imports. That means India has not only refused to comply with US dictates but has actually increased its purchases of Russian oil. It shows that the narrative circulating in parts of the media — that India is succumbing to US pressure — was incorrect.

 

While India has been reaping substantial economic benefits from these purchases, the US stance on the matter is simultaneously becoming a hurdle in trade negotiations between the two nations.

 

What is your prognosis for the India-US trade deal negotiations? 

The problem with the US is that it believes whatever it says must be accepted, but it fails to understand the political economy of India. I mentioned the red lines, which are in the public domain. The moment the government succumbs to any pressure, it would be perceived in India as a great nation bowing to US pressure.

 

The US has lost some sheen in recent weeks. People have seen how America has had to eat its own words regarding international agreements, whether peace agreements or others. Under these circumstances, it would not be wise for the government to proceed hastily with the trade negotiations.

 

Moreover, there are differences within the US regarding the Trump administration’s trade policies—not just with the US Supreme Court, but also with Trump's opponents within the Republican Party. A great deal of churning is already under way, so India will definitely wait and watch.

 

India could easily reach a deal with the UK, the European Union and others despite many differences, but I think what the US is asking for is something India cannot give.

 

When this framework deal was reached, there was a general feeling that something positive had happened. However, the statements coming from the US, which contradicted the contents of the agreement and undermined the political capital of the present dispensation, may have hardened the Narendra Modi government's position, particularly because those statements came from the highest levels of the US leadership.