As India continues its trade negotiations with the United States, former US President Donald Trump has announced a landmark trade deal with Indonesia, hinting that a similar agreement with India is underway. According to Trump, American companies will now enjoy full access to the Indonesian market, especially in high-demand sectors like copper, agriculture, and aviation. He suggested that talks with India are progressing along the same lines, raising questions about what such a deal could mean for Indian industries.
The US-Indonesia pact, reached after what Indonesian officials called an “extraordinary struggle,” reduces tariffs on Indonesian exports from 32% to 19%. In return, Indonesia has agreed to lift duties on several American agricultural and manufactured products. Additionally, the country will reportedly purchase $15 billion worth of US energy, $4.5 billion in agricultural goods, and 50 Boeing aircraft. This deal grants US firms wide-ranging market access, with zero tariffs on American exports.
Trump’s reference to India negotiating a similar agreement has sparked concern among trade analysts. While no new tariffs have been imposed on India so far, the US is pushing for quicker decisions with an informal deadline of August 1. According to American officials, this date is not a strict cut-off but is meant to accelerate negotiations. If no deal is reached by then, the threat of reverting to older, higher tariff rates remains—a tactic already applied to other countries in previous trade talks.
Experts warn that India must approach these negotiations with extreme caution. The Global Trade Research Initiative (GTRI), a New Delhi-based think tank, criticized Trump’s unilateral declarations, noting that such claims often precede actual agreements. Citing the Vietnam example—where Trump announced a 20% tariff without a finalized deal—GTRI cautioned against accepting verbal or informal understandings, especially those made through media or social media platforms. The think tank emphasized the need for a jointly issued, written agreement to ensure mutual clarity and accountability.
Furthermore, GTRI flagged serious concerns about the structure of the US-Indonesia deal. The United States securing zero-tariff access to the Indonesian market, while maintaining a 19% duty on Indonesian exports, reflects an imbalanced arrangement. If India were to accept a similarly one-sided deal, key domestic sectors like agriculture, dairy, and small-scale manufacturing could face significant setbacks due to an influx of duty-free US goods.
Agriculture remains a particularly sensitive issue in the ongoing US-India talks. Indian negotiators have maintained a firm stance on protecting this sector, given its importance to the country’s economy and employment. Meanwhile, the US is pushing India to step up purchases of petroleum and agricultural products, citing strategic and economic benefits.
As pressure mounts ahead of the unofficial August 1 deadline, India must remain committed to transparent, fair, and reciprocal negotiations. Trade experts agree that a poorly structured deal—especially one that sacrifices long-term domestic interests for short-term gains—would be worse than no deal at all. India’s approach must prioritize national interests, resist pressure for hasty concessions, and seek outcomes that ensure balanced economic growth on both sides.
Nithin Rosh 
Leslie Rajan