Three reasons why India-US trade deal stands on shaky ground

Subscribe to enjoy similar stories. India has secured lower tariffs from the US with the first phase of a bilateral trade agreement, but details shared last week, especially by Washington and President Donald Trump, have raised questions about the deal’s sustainability. Three issues sit at the core: Can India realistically buy $500 billion worth of US goods over five years? Has it committed to halting oil imports from Russia? And does the deal shield India from future tariff hikes or trade restrictions? Each of these questions highlights the gap between the deal’s promises and the practical challenges ahead.

Mint examines them one by one. As part of the framework, India has committed to increase imports from the US to $500 billion by FY31. That implies a compound annual growth rate (CAGR) of nearly 57% from FY26 levels of about $52 billion, a steep climb considering US imports to India have grown roughly 11% over the past decade.

At that pace, imports would likely reach only around $90 billion by FY31. Even if there is a scale up due to India opening up its markets for the US, the math does not add up. Madhavi Arora, chief economist at Emkay Global, estimates that in a best case scenario, India’s imports from the US could reach $125-140 billion, recording a CAGR of 20%.

A big part of this commitment is the purchase of Boeing aircraft, which is also unrealistic. “India has about 200 Boeing aircraft today. Even if airlines add another 200 planes at around $300 million each, that is only about $60 billion spread over five years—and this assumes airlines buy only Boeing, which is unrealistic given Airbus competition and commercial considerations," Arora added.