Andy Mukherjee: India’s trade deal with the US—Have gaps on farm produce been closed?

But before celebrations begin in New Delhi, the deal announced on social media by Trump and confirmed by Modi needs signatures. It also needs clarity about what the two leaders have actually agreed to.

For India, the threat of losing access to its biggest export market hasn’t been an entirely bad thing. The isolationism hubris that had crept into New Delhi’s approach to global trade has received a welcome jolt. The pressure from domestic industry to find alternatives to the American consumer has led to separate trade accords with the UK and EU. The latter pact will dismantle some of India’s more egregious non-tariff walls —built around quality control.

Modi has also started mending ties with China’s President Xi Jinping, frayed since the eruption of border hostilities in 2020 and aggravated by Chinese military support of Islamabad during last year’s conflict between India and Pakistan.

But there were problems. For three decades, India has cultivated the US as its buyer of first resort—not only for textiles, shrimp, jewellery and other labour-intensive industries, but also for its software services. A twin-pronged attack by the Trump administration on trade and work visas for Indian techies was upending the broader relationship. This wasn’t just some vague threat: New Delhi’s budget for 2026-27, released on Sunday, had markets worried about the fiscal cost of insulating the economy from Washington’s wrath.

That pall of gloom should lift and the risk of getting ousted from the US sphere of influence fall, provided that all the wrinkles that have been holding up the deal have been ironed out. But have they? Trump’s post says that Modi has “agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela." Modi’s acknowledgment of the accord, however, makes no mention of Russian oil. Has India agreed to an immediate halt, or a staggered drop?

Ethane, a byproduct of US shale gas, is attractive as a feedstock for Reliance’s petrochem business. Its refinery can handle Venezuelan heavy crude too. But when it comes to supplying petrol and diesel to 1.4 billion consumers, will state-owned Indian refiners be allowed to switch to Iranian barrels when Trump has threatened to impose a 25% tariff on countries doing business with Tehran? The actual contours of the Trump-Modi pact may have ramifications not just for India’s energy security, but also for the global oil and gas market.

Trump said that India will “move forward to reduce their Tariffs and Non-Tariff Barriers" against the US to ‘zero’ as well as purchase over ‘$500 billion’ of US energy, technology, agricultural, coal and other products. Are weapon systems part of the pact to reduce India’s traditional reliance on Moscow? Is unrestrained access to advanced AI chips on the table? Will US e-commerce platforms like Amazon.com be allowed to carry their own inventory? Once again, details are important.

Take agriculture. Will India relax its ban on genetically modified food crops when they aren’t allowed to be grown at home? India mixes 10 billion litres of ethanol with petrol annually—enough to absorb a hefty chunk of the corn harvested in the US Midwest. But US corn in Indian motorists’ gas tanks won’t be an easy sell.

It’s hard to preach the virtues of free trade to local farmers if they aren’t allowed to benefit from it. After Russia invaded Ukraine in 2022, the government forced Indian wheat producers to withdraw from the global market to feed the local population. With a recent one-off exception, that ban on exports still remains in force. Opposition parties will scrutinize India’s giveaways on agriculture especially closely.

India drove a hard bargain with Brussels on a more liberal visa regime for its students to seek work in Europe. The reason has been clear. With the US taking a hard stance on foreign-born employees, India’s politicians and bureaucrats needed an alternative.

However, for them—and the ruling party’s urban middle-class supporters — the draw of the US talent market remains undimmed by the surge in Immigration and Customs Enforcement (ICE) crackdowns. With Indians accounting for 70% of H-1B work visas, any concession from Trump on the $100,000 fee per new employee will play well for the Indian government at home, provided it has managed to swing it. ©Bloomberg

The author is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia.