US-India Trade Deal or Trap? GTRI Warns Trump’s 18% Tariff Cut May Hide Bigger Risks for India

Even after US President Donald Trump announced an immediate cut in tariffs on Indian goods to 18%, trade policy think tank Global Trade Research Initiative (GTRI) has urged restraint, warning that key claims surrounding the deal remain unverified. Ajay Srivastava, founder of GTRI, summed up the position bluntly: “Caution, not celebration, is warranted.”Trump’s announcement—made on Truth Social and echoed by Prime Minister Narendra Modi on X—outlined sweeping assertions. These included India halting purchases of Russian oil, sharply increasing imports of US (and possibly Venezuelan) oil, reducing tariffs on American goods to zero, and committing to buy $500 billion worth of US energy, technology and other products. However, GTRI points out that none

of these claims has been formally confirmed by the Indian government through an official statement or negotiated text.Key Uncertainties Around the Tariff CutGTRI has flagged ambiguity even around the headline tariff reduction. While Trump said US tariffs would fall from 25% to 18%, earlier punitive duties linked to India’s Russian oil imports had effectively taken the tariff burden to 50%. It remains unclear whether the reduction applies from 25% or from the higher effective level. Some reports cite White House officials as saying the Russia-linked penalty will also be removed, but there has been no formal clarification.The think tank also notes that while the US has struck reciprocal tariff arrangements with other countries—10% for the UK, 15% for the EU and Japan, and around 19–20% for several Southeast Asian exporters—important sector-specific duties will continue. These include 50% tariffs under Section 232 on steel, aluminium and copper, and 25% duties on certain auto components. By contrast, pharmaceuticals, aircraft and some electronics already enjoy zero-duty access, limiting the scope of any additional benefit.Big Promises, Long TimelinesTrump’s claim that India will eliminate both tariff and non-tariff barriers on US goods raises further questions. GTRI stresses that India has historically resisted opening sensitive areas such as food grains, genetically modified products and other tightly regulated imports. Without clarity on which sectors are covered, such statements remain speculative.The $500 billion purchase commitment has also drawn scepticism. India’s total annual imports from the US are currently under $50 billion, implying that reaching such a figure could take two decades or more. GTRI therefore sees this as a long-term aspiration rather than a binding near-term obligation.Srivastava cautioned that trade agreements require formal documentation and enforceability. “Until there is a joint statement, negotiated text and clarity on implementation, this should be seen as a political signal—not a concluded trade deal,” he said, reiterating that restraint is wiser than celebration at this stage.