A version of this essay was published by firstpost.com at https://www.firstpost.com/opinion/india-us-trade-deal-trump-skepticism-13977047.html

I am beginning to feel quite like ‘The Boy Who Cried Wolf’, who was destined to be ignored. Or maybe I am the boy who cried ‘The Emperor Has No Clothes’. For, I was skeptical last week about the India-EU FTA, which I called a triumph of hope over experience. Now I am equally skeptical about the so-called India-US trade ‘deal’, which in fact is not a deal at all, but a sort-of statement of direction about the way to an actual deal.

The AI-generated video about this essay Google NotebookLM:

I expressed my caution on a Malayalam TV program where the host was a retired Ambassador. He was less skeptical than me, but he understood where I was coming from: after all, a diplomat’s job is to put the best spin on the news (good or bad) from his country’s perspective. And I spent much of my professional career in marketing: I can tell spin when I see it.

Reason No. 1: Trump is famous for exaggeration and U-turns.

The very first reason for the scepticism about the Indo-US lovefest is that it was announced by President Trump, who, in the past six months, has, in his whimsical way, executed any number of U-turns, as well as Z-turns, and various other pretzel-logic twists, so much so that anything he says, and its opposite, can be equally true, in a quantum Schrodinger’s Cat sort of way. It is prudent not to take him at face value when he swears eternal allegiance to India. Again.

Quoth he: “It was an Honor to speak with Prime Minister Modi, of India, this morning. He is one of my greatest friends, and a Powerful and Respected Leader of his Country. We spoke about many things, including Trade, and ending the War with Russia and Ukraine. He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week! Out of friendship and respect for Prime Minister Modi and, as per his 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%. They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO. The Prime Minister also 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. Our amazing relationship with India will be even stronger going forward. Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most. Thank you for your attention to this matter!”

Okay. Very interesting. There has been no Indian readout corroborating a number of these claims, especially on agriculture, which I imagine is a redline, a no-go, for India.

Besides, these are supposed to be ‘reciprocal’ tariffs. If Indian tariffs go to zero on US products, why is the US imposing 18% on Indian products?

Reason No. 2: Desperation of ‘jilted lovers’

The ‘shotgun wedding’ vibe was present in the India-EU FTA as well: a sort of desperation. There is not much choice: you simply have to do this. I am not the only one saying this. Here is a tweet from a senior EU leader, former PM of Sweden and co-chair of the EU Council for foreign relations. Of course you could say that he would say this, wouldn’t he? But it happens to be true. The number of suitors is declining rapidly, so you compromise.

But that is not a recipe for the longevity of the relationship, nor for faithfulness. You can expect er… adultery (early and often). The roving eye roveth.

Reason No. 3: Agriculture and dairy red-lines

We really don’t know much about the fine print. I am aware that sales and marketing people tend to promise anything (even things they are completely aware are impossible) just to get the sale. Thus, when India diversifies away from the US market, and its Q3 numbers are not badly affected by the Trump tariffs, it is incumbent upon Trump and Navarro, Bessent, Lutnick et al to reverse their previous abuse, and be all milk and honey.

The problem here, as always, is the agriculture and dairy product front. It is an absolute red line for India: no government can afford to piss off its farmers, nor to open up the country, home of much of the world’s genetic diversity, to Genetically Modified Organisms (GMO) including Terminator Seeds (that would forever put farmers at the mercy of Cargill and friends).

Not only that, non-veg milk (that is, milk from cows that have been fed, among other things, ground-up animal bodies) is abhorrent to a large number of Indians. Not to mention the risk of things like Creuzfeldt-Jakob Disease or mad-cow disease (transmitted via feed that includes the ground-up brains of diseased cattle: see also the fatal brain disease Kuru, transmitted between cannibals in Papua New Guinea).

The US rather urgently needs to get rid of its soybean and corn mountains and milk lakes (in contrast with the EU’s butter mountain and wine lakes) and in both, exporters salivate at the prospect of the proverbial billion-customer market. (The Chinese expertly used this rather illusory meme to attract foreign makers of consumer goods. That didn’t end well).

In the case of India, there is no demand for soybeans, and the one place where I can see demand for corn is in ethanol, especially for blending into petrol. That would be a win-win, because it would reduce the need for India to grow highly thirsty sugarcane, thus drawing down the already alarmingly depleted water-table.

Reason No. 4: Russian oil and energy in general

The unseemly pressure over Russian oil raises hackles on the Indian side. After all, this is not the only time India has been pushed to the wall by American sanctions: there was the post-’Buddha is smiling’ period, and the prevention of the sale of ex-Soviet cryogenic rocket technology, as immortalized in Nambi Narayanan’s story in “Rocketry: The Nambi Effect”. Earlier, there was the embargo on supercomputers.

In each of these cases, India rode out the sanctions and denials. But the question arises: why should India not use Russian oil if it makes commercial sense to India? Just because there is a conflict between Russia and Ukraine? That is really not India’s problem: India does not have a dog in that fight.

Now there is the allegedly impending US attack on Iran. India has been denied Iranian oil for some time, and now under US pressure, it is being forced to ramp down its involvement in Chabahar Port in Iran that India built, and views as a gateway to Central Asia. Notably, China continues to import Iranian crude. Is India getting some relief there?

It is not realistic to imagine that large amounts of Venezuelan crude will now flow to India if it abjures the Russian stuff. For one, even though Reliance’s Jamnagar refiner can process the heavy, sour Venezuelan oil, it is said that Venezuela will take some time and a lot of money to ramp up its output because of years of neglect, lack of naphtha to dilute and pump out the crude, and so on.

Reason No. 5: Non-tariff barriers and subsidies.

The US claims that India will drop all its non-tariff barriers, but what is the guarantee that the US will not raise an impenetrable wall on their side? It is a simple matter to impose difficult-to-comply-with rules that basically say “Your products are not welcome”. These may include environmental, carbon tax, quality, and various other demands.

For example, there is the Merchant Marine Act of 1920 that insists that only American owned/built/crewed ships can transport goods between US ports. Then there are Buy American Act procurement restrictions that handicap foreign-origin products. Furthermore, quality standards e.g. on hormone-treated meat products, and on certification that seafood is tuna-safe have been used to keep out imported products.

The US Farm Bill provides gigantic subsidies for five major crops – corn, soy, wheat, rice and cotton – amounting to $9.3 billion in 2024. Reports suggest that crop insurance and new benefits from the ‘bridge payments’ announced in 2025 may add another $10 billion+ to this sum. That is an enormous subsidy, pricing competitors out of the market.

Reason No. 6: Loss of trust

Finally, there is a sixth and critical reason: the loss of trust. For the longest time, India had convinced itself that it was an essential strategic partner to the US, if for nothing else to contain China. But that illusion is now gone, quite possibly because the US has decided to create a G2 condominium with China and retreat into Fortress America. The US administration now considers India, at best, a transactional vassal, and at worst, a potential rival to apply the Thucydides Trap to: and what better than to do war by economic means? India has to adjust.

On the other hand, there are indeed positives. In the interest of fairness, here are the immediate views of Citibank and Bank of America, who both considered it a net positive for India.

If you accept the tariff re...