WASHINGTON, D.C. — While the newly announced trade deal between the United States and India has eased months of tension, it is unlikely to quickly restore trust between the two countries, according to a former senior U.S. government official.
The assessment was offered by Evan A. Feigenbaum, vice president for studies at the Carnegie Endowment for International Peace, in an opinion piece published on the think tank’s blog on Wednesday.
Feigenbaum said the agreement helps defuse a trade standoff that had become untenable for both sides, but cautioned that trust, once damaged, takes time to rebuild.
He noted that the timing of the announcement is significant, coming just a week after India concluded a long-negotiated Free Trade Agreement with the European Union. The contrast, he said, is stark. The EU pact is a formal trade agreement, while Washington’s understanding with New Delhi is a trade “deal,” a term that suggests flexibility and the possibility of reversal.
U.S. President Donald Trump has said the deal lowers tariffs on Indian exports to 18 percent, down from a combined 50 percent rate that included a 25 percent base tariff and a 25 percent penalty tied to India’s purchases of Russian oil. Trump has also said India will buy $500 billion worth of U.S. goods and services over time.
The White House has described the deal as including an explicit Indian commitment to stop buying Russian oil.
Feigenbaum said the previous tariff regime was unsustainable, as it blocked progress across the broader relationship, making a rollback inevitable. Allowing tensions to worsen further, he argued, would have caused lasting damage.
The revised tariff rate gives India a relative advantage, he noted. Most ASEAN countries face tariffs of around 19 percent, while Vietnam’s rate stands at 20 percent. Additional penalties apply in cases involving Chinese transshipment. In that context, an 18 percent tariff is favorable for Indian exporters.
However, Feigenbaum warned against overstating the benefit. Tariffs are only one element in trade and investment decisions, and differences of one or two percentage points are unlikely to outweigh Southeast Asia’s stronger supply chains and manufacturing base.
He also questioned the scale of the projected trade expansion. U.S. goods exports to India totaled $41.5 billion in 2024, while services exports reached $41.8 billion. Achieving $500 billion in trade, he said, would require a dramatic increase and should be viewed as aspirational rather than assured.
Energy remains a particularly sensitive issue. Feigenbaum said India has been gradually reducing imports of Russian crude but is unlikely to formalize such commitments publicly. India’s longstanding ties with Russia and its emphasis on strategic autonomy make an explicit break politically difficult.
Most importantly, he argued that recent months have re-politicized a relationship that had been largely depoliticized since the 2000s. The earlier oil-linked tariff, which tied trade penalties to third-country choices, set a precedent that could linger.
Washington and New Delhi are in a better position than they were months ago, Feigenbaum wrote, and both sides should take the win. But he cautioned that rebuilding trust will take time. (Source: IANS)
