India-US trade deal is a lifeline for Washington’s lobby, not India's workers

India’s short‑term appeasement of the US complicates its long‑term economic diplomacy

The biggest beneficiaries of the February 2 ‘Framework for an Interim Agreement’ on trade between India and the United States are not the hosiery workers of Ludhiana or the diamond cutters of Surat, who ought to fit that slot.

Instead, it is the US lobby in India, which has been pulled back from the edge of an abyss by what is commonly being referred to as a trade deal between Prime Minister Narendra Modi and US President Donald Trump.

This influential lobby lost no time from February 2 itself in claiming that India-US relations are back on track as if nothing negative or unpleasant happened between the White House and Raisina Hill, the seat of power in their respective capitals, in the last year. In prolific writings, false front speeches, and ubiquitous television appearances, this lobby continues to pretend that there is deep strategic convergence between India and the US, now that punitive tariffs imposed by Trump on Indian exports to the US are out of the way. They are spreading the falsehood that Pakistan and Russia are complicating India’s relations with the US. With Iran not far behind. The US lobby disinforms that otherwise, Trump and Modi are poised to take forward what their respective predecessors Bill Clinton, George W Bush, and Barack Obama, on one side and Atal Bihari Vajpayee and Manmohan Singh, on the other, built step by step in 25 years.

Whereas in truth, the trust between New Delhi and Washington, which has never been very high — unlike the trust between the Soviet Union and India — is now completely broken. It will not be easily rebuilt. It is dangerous for a rising power like India to be fed the fabrication that its future lies entirely with a declining power such as the US.

Washington suffers from a sense of entitlement toward India. Because it signed a nuclear deal with New Delhi, for instance, the thinking in the US capital is that it is entitled to be India’s preferred partner in promoting nuclear energy. Such an argument has been repeatedly weakened since the deal was signed by structural handicaps on the US side. In this and other processes, the US has picked the wrong kind of retired bureaucrats as its lobbyists in India via multiple avenues. These are bureaucrats who no longer have any clout in New Delhi’s corridors of power or in the state capitals. Or they are in the crosshairs of those who wield power in Modi’s ‘new’ India. Rather than lose their well-paid jobs and perks like business class air travel to New York, Boston or San Francisco, they give advice to their benefactors, which are not based on realities. They tell Americans what they want to hear, not what they ought to hear. Such an attitude threatens any significant rebuilding of India-US ties after the new trade deal.

As confusing details of this trade deal trickle out in fact sheets, joint statements, briefings, and ‘unguided missiles’ fired from Trump’s ‘Truth Social’ media platform, it is clear that the deal has the potential to muddy the waters which sustain India’s trade ties with its other partners. Complaints aimed at India are likely to mount in the World Trade Organization (WTO) from countries which will not get the same unilateral tariff concessions being offered by New Delhi only to Washington. Is India ready to give short shrift to the WTO and other multilateral bodies like Trump is doing? Trump can afford to be a wrecking ball to the WTO and the like, but India is not in the same league. It will soon regret such actions if they are resorted to.

An important fallout of adverse commercial decisions by the US against India in 2025-2026 and the contrived appeasement of Trump now is that India is now racing to conclude free trade agreements (FTA) with most countries, which are willing to sign them. This is a sea change from the attitude of Udyog Bhavan, the old headquarters of the commerce ministry. If this is the ministry’s new policy, then a reconsideration of the rejection of the Regional Comprehensive Economic Partnership (RCEP) is called for. Most South-East Asian countries were annoyed with India for turning its back on the RCEP at the last minute before it was signed and sealed.

The new realities also call for resuming trade with Pakistan because such a reversal of policy will help Indians in its border states. Resumption of trade with Afghanistan logically calls for similar action with Pakistan. These two countries are like the proverbial pot and kettle, both black. Fortunately, the government has recently decided to change course on business ties with China. Welcome though it is, such flip-flops expose India to the charge that it is as whimsical as the US under Trump.

K P Nayar has extensively covered West Asia and reported from Washington as a foreign correspondent for 15 years.

(Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.)