“The United States of America (United States) and India .. announce(ed) that they have reached a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade (Interim Agreement)”. “It will include additional market access commitments .. commitment to reciprocal and balanced trade ..” “India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products, ..”. “The United States will apply a reciprocal tariff rate of percent”. “India intends to purchase $500 billion of U.S” and “… further expanding market access opportunities through the negotiations of the BTA”. Finally, “The United States and India will promptly implement this framework and work towards finalizing the Interim Agreement with a view to concluding a mutually beneficial BTA”.In brief, now a ‘framework’ for Indo-US trade has been announced. This is supposed to lead to the “Interim Agreement” by mid-March and later there will be a “mutually beneficial BTA (Bilateral Trade Agreement)”.In other words, only a broad understanding has been reached but the details are being worked out. So, what is announced now can be changed. Given that the deal is one-sided, the likely changes will also be in favour of the US. India’s willingness to bend over backward to have a deal can be used to further coerce India for even better terms. The example of S Korea is before us. US threatened to change the deal under the pretext that it was not fulfilling its commitments.One-sided dealIndia is committing itself to ‘balanced trade’, that is, India’s existing trade surplus has to be eliminated. That would force India to reduce its exports and/or increases its imports from the US. India’s exports are likely to decline due to the imposition of protectionist tariff of 18% by the US. Earlier the tariff was an average of 2.5%. So, the price of Indian exports in the US market will go up compared to a year back, even if the Indian exporters reduce their margins somewhat. This would reduce demand for Indian products in the US.This is countered by arguing that the US tariff on Indian exports would be lower than what some of its competitors have to pay. But, this difference in the case of many of the competitors like, Bangladesh and Vietnam, is negligible so it would hardly make a difference. They were anyway more competitive so they would still have an edge over India.More importantly, president Trump wants production to occur in the US and he is asking MNCs to invest in the US. That is why he is levying protectionist tariffs on all. If this happens, the overall US imports would decline and reduce the markets for all and force fierce competition for the US market. Thus, what India may gain due to lower tariffs than its competitors could be lost as the US market contracts due to local production.In February 2025, when prime minister Modi met president Trump, they agreed to a two way trade of $500 billion by 2030. This has been turned by Trump into a $500 billion import by India in 5 years. Is this feasible given that imports were at $42 billion in 2024-25? The target for imports will rise steeply by the fifth year and if that does not happen, it could become the excuse for imposing fresh conditions on India.Worse, there is promise of “balanced trade”. So, if India is not able to sharply increase its imports from the US, it will have to reduce its exports to the US. This would impact India’s growth rate.The one-sidedness of the deal becomes even more apparent when India’s imports of Russian crude oil is considered. The removal of penal tariff of 25% is contingent on reducing these imports to zero. This has little to do with balanced trade with the US. This is coercion by Trump and India has allowed the US to impact our strategic relations. The gradual reduction in imports of Russian crude has reached a point where now the economic cost of cutting off import of Russian crude is not that great. The cost is strategic and political.Agriculture and foodThe greatest fear has been that the interest of agriculture would be sacrificed. This was because the statements from the US that the US farmers will have access to the big Indian market. The official Indian position has been to the contrary. Namely, India will get access to the US markets for many key commodities while India’s agriculture produce will largely remain protected.The minister of commerce said, “All sensitive items have been kept out of the deal.” For instance, genetically modified items will not be allowed into India. And, there will be no tariff reduction on poultry, dairy, soybean, maize, rice, wheat, fruits such as bananas and citrus fruit, lentils like moong, oilseeds, ethanol, etc.Further, he said, several of India’s agricultural exports will see duty reduced from 50% to zero – such as, spices, tea, coffee, coconuts, vegetable oil, areca nut, cashew nuts, several fruits and vegetables, such as avocados and mangoes, cereals like barley and processed foods.The agreement lists greater market access to US farm produce through elimination or reduction of tariffs for Distiller’s Dried Grains with Solubles (DDGS), soyabean oil, red sorghum for animal feed, tree nuts, fresh and processed fruits, wine and spirits, and “additional products”.Dangerous unspecified features‘Additional products’ can mean anything. Since Trump has changed agreements at the drop of a hat and India’s negotiations will continue for a while till the BTA is signed, any product can be included under this catch all phrase.The language used in the agreement is also tricky as some analysts point out. For instance, the clause on digital trade can prevent India from pursuing its interest and increase dependence on US tech companies. India’s certification regulations will have to be modified since they are likely to be labelled as non-tariff barriers. In contrast, US regulations will not undergo any changes to benefit Indian exporters. Finally, there is the worrying statement that the two sides “.. agree to strengthen economic security alignment to enhance supply chain resilience and innovation through complementary actions to address non-market policies of third parties..”. It implies that India may have to mould its relations with other countries.ConclusionThe Agreement states, “United States and India will work towards further expanding market access opportunities through the negotiations of the BTA”. Thus, the agreement is only the beginning and much can change by the time the Trade Agreement is signed. India not being able to have a balanced trade with the U S in the foreseeable future will provide the excuse to President Trump to squeeze India further. Balanced trade with the U S will require India to squeeze exports and increase imports thereby reducing its internal market and slowing the economy. All this will impact the interest of our farmers and workers. They are already at the receiving end due to the labour related changes being brought about by the government.In spite of the Agreement being presented officially as win-win, it is one-sided. That is also the case with the European Union (EU) and UK agreements. Consequently, our terms of trade with advanced countries are likely to shift against us. This would set up a vicious cycle whereby India would be forced to grant more concessions, even in sectors that it presently says are protected. As India ties in its economy more closely with the Western bloc, its chances of cooperating with other nations to resist impositions will diminish – like in BRICS or SCO. The sub-text is not pro-India.Arun Kumar is the author of Indian Economy’s Greatest Crisis: Impact of the Coronavirus and the Road Ahead. 2020.