Art of the India-US trade deal’s revival: The end of a rift between the two partners could spell gains all around

Subscribe to enjoy similar stories. It is plainly good news the US has lowered its import duty on Indian goods from 50%, a truly punitive rate, to 18%. A trade deal is expected to be sewn up anytime now.

Its significance goes beyond the impact of a lower US barrier for our exports. Indeed, it signals an end of the rift between India and the world’s largest economy and mightiest power. That rupture had cast a long shadow of risk on all manner of American economic dealings with India, from setting up factories here to investing in our capital markets.

No wonder Indian stock market indices shot up in relief. Earlier, US President Donald Trump’s apparent indifference to a weakening dollar had sent US markets into a slump, dragging markets elsewhere down, ours included. Now that it is clear that India-US relations are back on an even keel, Indian equities have rallied.

It is a sign of the mutual gains expected should our bilateral trade take the trajectory that was once envisioned—with Indian manufacturers drawn into the loop of American supply chains. For now, labour-intensive industries that were reeling under Trump’s tariffs have reason to rejoice. As reported, the contours of an India-US pact had been thrashed out earlier; even its finer details had been falling into place, with some divergences over US access to Indian markets for agri-products the last bits left to address.

What got in the way, it seems, was Trump’s ire over India’s oil imports from Russia. He has portrayed his sudden rethink as a result of a concession that he claims to have extracted from New Delhi—that our Russian shipments would stop. In any case, US sanctions had imposed a squeeze, although that did not mean Russian oil had no way of finding its