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The biggest concession that U.S. President Donald Trump may have arguably wrung out of Prime Minister Modi was the opportunity to announce the “deal” first. The only reason that word appears in quotes is because, strictly speaking, no deal with Trump is done till it has been inked. The Canadians and Mexicans found that out the hard way.
What Modi and Trump have finalised is a framework for a deal, and interlocutors on both sides will now sit together to work on finalising a joint statement, followed by the signing of the agreement.
But despite no visibility on the fine print, the broad contours of the understanding have been placed in the public domain by both sides.
Under the agreement, nearly $30 billion worth of Indian exports will face an 18 percent tariff, even as labour-intensive sectors are expected to gain a competitive edge. There is no change in tariffs for sectors covered under Section 232, including automobiles and steel. India, for its part, intends to purchase up to $500 billion worth of U.S. products critical to its economic security over the next five years, spanning oil and LNG, aircraft and components, precious metals, diamonds, technology products, high-end chips and data-centre equipment. About $44 billion worth of goods that were earlier exempt from reciprocal tariffs will continue to remain so, including pharmaceuticals, mobile phones, minerals and natural resources. Crucially, India’s red lines on agriculture and dairy have been respected.
That last bit is what stands out. India clearly has not budged on its most closely held red lines. The India of an era gone by would not have been able to go toe-to-toe with the United States.
Examples abound. Across the 1990s and 2000s, India repeatedly accommodated U.S. pressure, accepting stricter IPR rules under the WTO, aligning geopolitically during the civil nuclear deal, cutting Iranian oil imports, absorbing the loss of GSP benefits, softening positions on data, climate and trade, and deepening defence interoperability, often recalibrating later to reclaim autonomy.
Modi’s India is different. Over the last decade, India has emerged as an independent and indispensable economic pole holding up a significant share of the global economy. At 17 percent, India is second only to China in contributing to global real GDP growth. As Ian Bremmer, President of the Eurasia Group, puts it, no serious conversation on the global economy can happen without India.
That growing heft has translated into leverage. It explains why Trump, who has shown little hesitation in publicly browbeating even long-standing U.S. allies, has chosen restraint in his dealings with New Delhi, whether on tariffs, market access or strategic alignment. In a world shaped by Darwinian principles, power commands respect. This is not to suggest that a Trump-led United States regards India as a strategic equal, but to underline a reality Washington cannot escape: Delhi is a meaningful partner whose autonomy has to be acknowledged and, increasingly, respected.
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