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In India-US deal, Trump's claims range from zero to $500bn: Five questions over what Modi ‘committed’
Trump said India to “move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO”. This, and other points led to questions.
It was hanging fire for a year, with major troughs in between; and then it happened all too quickly. The manner in which a US-India trade deal was announced by President Donald Trump, and then confirmed by PM Narendra Modi, on Monday has left many questions unanswered. Mathematically, these questions range from zero to 500 billion.
First, the Russian oil
In his Truth Social post, Trump described Modi as a “great friend” and "powerful leader", terms he used even when he and administration berated New Delhi on global stages over the past few months. And then he declared, unilaterally, that Modi had “agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela”.
India's Russian oil purchases, despite the war in Ukraine, were the reason for half of the 50% tariff rate imposed by Trump.
That 25% went poof with this statement, confirmed later by US envoy Sergio Gor.
Also read | No word on India stopping oil purchase: Russia on Trump's claim
Trump also declared that “as per (Modi's) request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%”.
This meant the 50% rate effective since August 2025 goes down to 18%, higher than the pre-Trump era but moderate given the “mercurial” nature of the 79-year-old realtor-cum-reality TV star-cum-politician.
Zero tariffs by India on US?
It's the following sentences that raised more questions than answers for the Modi government, which had so far not clarified on these.
Trump declared that India will “move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO”.
Does that mean India pays 18% and the US pays nothing? Opposition leaders and analysts have asked this, seeking a specific discussion in Parliament which is currently in session.
Trump further said Modi committed to “BUY AMERICAN" at a much higher level, “in addition to over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products”. In Indian rupees, that is around 45 lakh crore.
India's yearly imports from the US currently are around $45 billion, and there was no clarity on what Trump meant by the $500 billion figure. There was no timeline too.
“Mr Trump says $500 billion; our entire import bill is $700 billion,” said Congress MP Shashi Tharoor, "So, do we stop buying from every other country? We would love to celebrate if it's good news, but give us clarity."
Agriculture sticks out
Another word mentioned by Trump is at the nub of the next big question: agriculture.
The Indian side has repeatedly said it won't open up its agriculture, dairy and farming-allied sectors to US goods — with foreign minister S Jaishankar mentioning “red lines”. Even when the US hiked the tariffs to a historic 50% six months ago, the PM Modi made a public statement: "Modi stands like a wall; will not compromise on farmers.”
Trump's mention of agriculture thus has riled up the Opposition.
"India stands diminished by this unfortunate sequence of events. Parliament is in session. The text of both the EU and US trade deals must be laid on the Table of both Houses and debated — especially since the US Secretary of Agriculture, Brooke Rollins, has issued a statement claiming that India has liberalised agricultural imports from the US," Congress party comms head and MP Jairam Ramesh said.
US agriculture secretary Rollins on Tuesday said that, as per the India-US deal, Washington will export more of its farm products to India. Rollins said that the deal will pump more cash into rural America.
“Thank you, US President Donald Trump, for once again delivering for our American farmers,” she wrote on X, “New US-India deal will export more American farm products to India's massive market, lifting prices and pumping cash into rural America.”
"India's growing population is an important market for American agricultural products, and today's deal will go a long way to reducing this deficit. America First victory..."
India was yet to detail out the tenets of the deal, as of Thursday 1:30 pm.
The farm sector supports nearly half of the nation’s population and agriculture accounts for nearly 18% of India’s GDP, which explains the country’s continued protectionism.
What's the deal with Venezuela?
Coming to crude again.
Besides the Russian crude oil question, there's also Iran, and Venezuela — all of which find a mention in Trump's claims. He has said India will buy more oil from Venezuela, where the US recently forced a regime change by taking its President Nicolas Maduro away in the middle of the night.
He also recently said anyone buying from Iran would face another 25% tariff, briefly raising fears that India would suffer. India has already, according to reports, exited the Chabahar port project in Iran after US sanctions.
Then on Saturday, Trump claimed India will buy oil from Venezuela instead of Iran. India does not import significant amounts of crude oil from Iran due to US sanctions, though prior to the sanctions, Iran was one of India's top sources of crude oil.
PM Modi, just last week, spoke with Venezuela's Acting President Delcy Rodriguez, who apparently has oblique US backing.
The government said Modi and Rodriguez “agreed to further expand and deepen the bilateral partnership in all areas, including trade and investment, energy, digital technology, health, agriculture and people-to-people ties”.
Trump has claimed he is now running Venezuela and has allowed Maduro's vice-president Delcy Rodriguez to be interim leader so long as she does what he wants — in particular, granting the United States access to Venezuela's vast untapped oil reserves.
The Congress also questioned the Venezuela part.
“I was surprised and wondered if Trump identified himself as the Acting Prime Minister of India. These things are not being announced by the Prime Minister first, but by Trump,” party MP Sukhdeo Bhagat said.
“We came to know everything about India through Trump — who will we purchase oil from, who will we have a trade deal with. Has PM Modi grown so weak? This is not our victory; this is an Agreement,” he said.
India-Pak ceasefire question returns
An older question made a comeback too.
“Even during Operation Sindoor, Trump made the decision to end the India-Pakistan war,” Congress leader Udit Raj commented.
He was referring to Trump's repeated claims in May last year that he brokered the ceasefire after India attacked terror groups' bases in Pakistan in retaliation for a terror attack in Kashmir's Pahalgam.
He was also reportedly upset that while Pakistan agreed with his claim and even supported his claim to a Nobel Peace Prize, India did not. The Modi government has asserted that it did not, and does not, act on anyone's cue on such decisions.
"So far, we had doubts, but now it is confirmed that even our domestic policies are being influenced by Trump," Udit Raj said.
BJP and NDA constituents, meanwhile, felicitated PM Modi at Parliament on Tuesday, hailing him as generational leader who had “made history”.
As for the countours of the deal, an executive order from the US may provide clarity on the tariff issues, Reuters noted. The trade deal document is expected to outline the sectors covered under the agreement. Both were awaited.
Union minister JP Nadda said in Parliament that the government will issue a statement, sharing details of the deal; and is also ready to hold a discussion, amid sloganeering from the Opposition in the Rajya Sabha.
Scale of the trade
During 2021-25, the US was India's largest trading partner in goods. It accounts for about 18 per cent of India's total exports, 6.22 per cent in imports, and 10.73 per cent in bilateral trade.
In 2024-25, the bilateral trade touched $186 billion — that included $86.5 billion in exports and $45.3 billion imports.
Hence, India had a trade surplus with the US — the difference between imports and exports — of $41 billion in 2024-25. This gap has widened steadily. In services, India exported an estimated $28.7 billion and imported USD 25.5 billion, adding a $3.2 billion surplus. Altogether, India ran a total trade surplus of about $44.4 billion with the US.
Trump has underlined this gap, and wants India to balance it by allowing more US goods.
There are some clear positives even when details are sketchy.
"The agreement removes Indai's earlier disadvantage versus peers," Neelkanth Mishra, chief economist at Axis Bank, was quoted as saying.
Among India's Asian peers, US tariffs on Indonesia stand at 19%, while the rate for Vietnam and Bangladesh stands at 20%.
The announcement of the trade deal has reduced a great deal of global uncertainty, India's economic affairs secretary, Anuradha Thakur, said at an event in New Delhi on Tuesday.
