Trump's Trade Deal with India: A $500bn Deal, But What's the Catch?

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In a surprise move, US President Donald Trump announced a trade deal with India, claiming that Prime Minister Narendra Modi had agreed to stop buying Russian oil and buy more from the US and Venezuela. The deal, which Trump described as a 'great victory for American farmers,' has left many questions unanswered. According to Trump, the deal includes a reduction in tariffs from 25% to 18% and a commitment from India to buy $500 billion worth of US goods, including energy, technology, and agricultural products. However, the details of the deal are still unclear, and opposition leaders have questioned the timeline and scope of the agreement. One of the key issues is the mention of agriculture, which the Indian side has repeatedly said it won't open up to US goods. Trump's statement has riled up the opposition, with Congress party comms head and MP Jairam Ramesh saying that the deal will 'stand diminished by this unfortunate sequence of events.' Another issue is the mention of Venezuela, where the US recently forced a regime change. Trump has claimed that India will buy oil from Venezuela instead of Iran, but the details of the deal are still unclear. The Congress has questioned the Venezuela part, with party MP Sukhdeo Bhagat saying that the agreement 'is not our victory; this is an agreement.' The trade deal has also raised questions about the influence of Trump on India's domestic policies. Congress leader Udit Raj commented that 'so far, we had doubts, but now it is confirmed that even our domestic policies are being influenced by Trump.' Despite the uncertainty, there are some clear positives. The agreement removes India's earlier disadvantage versus peers, and the announcement has reduced global uncertainty, according to India's economic affairs secretary, Anuradha Thakur. The trade deal is expected to provide clarity on the tariff issues, and an executive order from the US may outline the sectors covered under the agreement. The Indian government has promised to issue a statement sharing details of the deal and is ready to hold a discussion in Parliament. The trade between the US and India has been significant, with the US being India's largest trading partner in goods. In 2024-25, the bilateral trade touched $186 billion, and India had a trade surplus with the US of $41 billion. Trump has underlined this gap, and wants India to balance it by allowing more US goods.