Trade deal with US infringes on India`s sovereignty and leaves a Russia question, experts explain why

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The India-US trade deal is being celebrated in the United States and being criticised in India. While ruling politicians in India celebrate the reduction of tariffs to 18%, neither the opposition nor the internet is happy about it. The reason is the past data and the Russian oil issue. The United State has officially warned that it will monitor India’s purchase of Russian oil through direct or indirect channels, and if it finds that Delhi has resumed crude import from Moscow, it can re-impose the tariffs. 

While the American documents clearly links the trade deal, tariffs and Russia-India ties, the Narendra Modi government is in denials. Commerce Minister Piyush Goyal said that his work is to conclude the trade deal and the Russian oil purchase issue lies with the Ministry of External Affairs. On the other hand, when External Affairs Minister Dr S Jaishankar was earlier asked the same questioned, he asked the reporters to connect with Goyal/commerce ministry. If one could remember, it was Jaishankar himself who once told the world that India can’t be dictated on what to buy and from where to buy. The pride is gone now. The US has successfully coerced India and Delhi has succumbed to the pressure, feel experts. 

However, the MEA has issued a statement saying that India diversifies its oil imports as per market conditions, and the decision is taken based on meeting the energy needs of 140 crore citizens of the country. 

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But there is no straight rejection of America’s claim. This further raises speculations. Shiv Sena-UBT MP Priyanka Chaturverdi also flagged the issue. “The President Trump executive order very clearly says if India buys Russian oil directly or indirectly, the tariffs can be reimposed, meaning this trade deal will be null and void. What is the Minister even claiming that the trade deal is independent from the oil purchase decision is? Minister,  these aren’t two separate ministry issues but are directly connected to each other – the trade deal has come at the back of an assurance of being told where to buy oil from or not buy it from. These answers coming from a space of arrogance reinforce the fact that we allowed the USA to influence our national interests for its own gain & we buckled,” said the MP.

Even experts are flagging the issue on social media. An expert explained how the deal infringes upon India’s sovereignty. “It is not my point that the trade deal does no good– lowering tariffs on India’s imports was long overdue….However, the US raised tariffs from 2.4% effectively to 18%. In addition, India gave up on sovereign decisions on where to buy oil from. In the past, India has compromised on oil from Iran and Venezuela, but now the US has forced it to compromise on oil from Russia, its biggest defence partner,” said Kunal Singh, Research Fellow at Harvard Kennedy School.

Singh further said the situation cannot improve even after Trump leaves office, because a future president would know that India can be successfully coerced. “Since new markers have been laid, any future bargaining with India will start with a terrible first offer from the US. Even if a future US president would like to be generous– why would they?” he said.

“The deal goes beyond and infringes on India’s sovereignty in unprecedented ways. India’s defence partnership with the US is nowhere near what it is with Russia. India is now allowing the US a vote on its relationship with Russia. It is a bad deal and needs to be called out,” said Singh.

Tanvi Ratna, Geoecon analyst and founder of Founder Policy 4.0, said that Trump has always hyphenated India with Russia. “In Trump’s calculus, India was hyphenated with Russia from day one. The tariff pressure was leverage—not against India’s trade surplus, but against India’s Russia ties…If Russia-Ukraine talks break through, I would expect the India-US deal to solidify past the “interim” draft. If they collapse, expect volatility to return,” she said.

Piyush Goyal and Dr S Jaishankar’s evasive replies show that India is still not comfortable with the US trade deal, and there is unease within the government, too. The two ministers have been very vocal when it comes to India’s pride and sovereignty, but not this time. The ambiguity around India’s Russian oil imports adds uncertainty to the trade deal with the US. Experts contend that this is not a trade deal at all, but a bargaining exercise where India has far more to lose than to gain, because it’s driven by Trump’s coercive policies and not a mutual understanding between the two nations. 

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