Context:

• The India–US trade deal negotiations have entered a crucial phase, with media reports suggesting the possibility of finalisation during the meeting between the Indian Prime Minister and US President at the ASEAN Summit in Kuala Lumpur (October 26–28).
• As both nations approach the deal’s “endgame”, India must safeguard its long-term economic interests and strategic autonomy.

Background:

• The trade negotiations aim to address tariff and non-tariff barriers impacting bilateral trade.
• The US seeks greater access to India’s markets, particularly in digital services, agriculture, and intellectual property.
• India aims to secure tariff concessions and expand exports while protecting domestic industries and policy space.

Key Issues and Considerations:

• Written agreement before announcement:
  • India must ensure that all commitments are documented before public announcements.
  • Past instances show the US has altered terms unilaterally post-negotiation — India must guard against such last-minute changes.
• Avoiding last-minute US demands:
  • Historically, the US has introduced new conditions during final negotiation rounds at GATT/WTO.
  • India should resist such pressures even at the cost of delayed finalisation and consult all relevant ministries and stakeholders.
  • New demands can be deferred to a “Phase II” of negotiations for later discussion.
• Reducing overdependence on US markets:
  • Over-reliance on one export destination can make India economically vulnerable.
  • India must ensure the trade deal does not deepen dependence on the US or support US efforts to isolate China through “supply chain resilience” clauses.
  • Safeguarding India’s autonomy in trade partnerships and participation in global value chains is essential.
• Assessing the cost of concessions:
  • India must evaluate how the deal alters its existing rights and obligations.
  • US trade deals with Japan, EU, and Vietnam show that partner nations often -
    • Reduce tariffs on industrial and agricultural goods.
    • Offer major concessions, while the US reciprocates marginally (e.g., reducing 50% tariffs to 15–20%).
  • India must avoid an asymmetric agreement that undermines its developmental and industrial policy space.
• Protecting red lines - Farmers, fishermen and digital sovereignty:
  • Though assurance on protecting farmers’ and fishermen’s interests is significant, negotiators must also uphold red lines in digital economy and intellectual property rights (IPR).
  • The digital sector holds immense potential for India’s Atmanirbhar Bharat vision and future economic growth.

US Interests in the Digital Economy and the Threat of Non-Discriminatory Clause:

• The core of US interests:
  • First, prevent India from imposing taxes on digital players headquartered in the US.
  • Second, prevent India from leveraging its data advantage and creating domestic digital champions, including through sharing anonymised government data exclusively with Indian domestic entities.
  • Third, prevent India from effectively regulating the digital sector.
• Threat: A clause stating “both countries agree to grant non-discriminatory treatment to digital services” could -
  • Restrict India’s ability to promote homegrown digital platforms (e.g., Arattai).
  • Undermine data sovereignty and domestic innovation.
  • Prevent India from taxing US digital giants like Google, Meta, or Amazon.
  • Dilute India’s Atmanirbhar and Swadeshi policy objectives.

Challenges for India:

• Power asymmetry in political and economic leverage favours the US.
• India’s non-confrontational approach limits its bargaining strength.
• Securing a mutually beneficial agreement under these conditions would be a diplomatic achievement.

Way Forward:

• Maintain strategic autonomy: Avoid clauses that constrain India’s independent trade or digital policies.
• Insist on reciprocity: Ensure fair tariff reductions and market access from the US side.
• Protect core sectors: Uphold red lines in agriculture, fisheries, and the digital economy.
• Enhance diversification: Reduce export dependence on any single market to strengthen resilience.
• Be prepared to walk away: As Chanakya advised, when treaty benefits are unfairly distributed, non-agreement is preferable to an unequal one.

Conclusion:

• The India–US trade negotiations represent both an economic opportunity and a strategic test for India.
• While cooperation with the US can strengthen trade diversification and global integration, India must vigilantly protect its sovereignty in the digital domain, agriculture, and trade policy space.
• Walking away from a one-sided agreement would not signify weakness but strategic prudence — aligning with India’s long-term vision of Atmanirbhar Bharat and sustainable global engagement.