In a significant breakthrough after months of tense negotiations and public sparring, Washington and New Delhi have sealed a trade deal that slashes US tariffs on Indian goods from 50 per cent to 18 per cent. While the fine print is still awaited, industry leaders are already calling it a turning point not just for trade, but for geopolitics.
Speaking exclusively to NDTV's Senior Executive Editor Aditya Raj Kaul, Mukesh Aghi, President and CEO of the US India Strategic Partnership Forum (USISPF), described the agreement as far more than a tariff adjustment.
"It's a win-win for the people of the US and India. You have to ignore the domestic noise created by politicians on both sides. Overall, this is a partnership that goes beyond trade and will have a geopolitical impact."
India's Tariff Edge Over China and Asia
Aghi emphasised that the 18 per cent tariff rate places India in a uniquely advantageous position compared to other Asian manufacturing hubs.
China currently faces 24 per cent tariffs, Vietnam and Bangladesh 20 per cent, and Pakistan 19 per cent. "It sends a message that for President Trump, India is very important," Aghi said.
For American companies pursuing a "China-plus-one" strategy, the math now favours India.
"All the components coming from China into the US are subject to a 34 per cent tariff. Now we are coming down to 18. That has a very different impact."
The reduced tariffs are expected to boost India's labour-intensive exports and strengthen US supply chains that are increasingly diversifying away from China.
Russian Oil: Adjustment, Not Compromise
One of the most sensitive aspects of the negotiations reportedly involved US concerns over India's continued purchase of Russian oil. Aghi acknowledged that energy sourcing did factor into the talks but rejected the notion that India had compromised its strategic autonomy.
"When you make partnerships, you have to adjust to other people's needs without sacrificing national interest. India is a proud nation and will decide what's good for India."
He pointed out that India had already begun reducing Russian oil purchases following sanctions on two Russian companies and suggested that imports would gradually shift toward the US and other suppliers like Venezuela.
"It may not stop overnight, but you will see a reduction coming through."
Business Sentiment Remains Strong
Despite months of trade uncertainty, Aghi revealed that global corporate sentiment toward India has remained overwhelmingly positive.
"I have talked to over 100 global CEOs in the last six months. Not a single one told me they were reducing investment in India."
He highlighted the rise of over 2,000 Global Capability Centers in India, 60 per cent of them American, engaged in high-end R&D and innovation. In the past two years alone, these centres have generated over 300,000 intellectual property filings.
This, he said, underscores why India continues to be seen as indispensable in global supply chains.
A Broader FTA Wave Toward India
The US deal comes amid a flurry of trade agreements India has recently signed with the UK, New Zealand, Oman, and the European Union after nearly two decades of negotiations.
According to Aghi, this is no coincidence.
"When tariffs are rising from the US side, countries are asking where else they can pursue market access. India, with 1.4 billion people and a $4 trillion economy growing at 7-8 per cent, becomes critical."
He cited Apple as a case study: five years ago, Apple had negligible domestic sales in India. Today, it records over $9 billion in domestic revenue, and exports from India have surged, with iPhone production increasingly based in the country.
"This is the story of making India for India and making India for the world."
The $500 Billion Ambition
Trump has spoken of a potential $500 billion trade target between the two nations. Aghi believes this is realistic over a five- to seven-year horizon.
India imports over $120 billion worth of energy annually and is a major defence buyer. Redirecting a portion of this toward the US is, in his view, a natural evolution of a deepening partnership.
"That number looks very big today, but over the long term it is achievable."
Geopolitics Driving Convergence
Aghi repeatedly stressed that the trade deal cannot be viewed in isolation from the geopolitical context. With China becoming "more aggressive and assertive", both Washington and New Delhi are seeing greater strategic alignment, particularly in the Indo-Pacific.
"India has a friend in the US, and the US needs India as a friend."
He noted that despite earlier rhetorical tensions, the personal rapport between Trump and Prime Minister Narendra Modi remained intact, helping smooth the path to the agreement.
The Real Challenge: Ease of Doing Business
If there is one area Aghi believes India must continue to improve, it is the ease of doing business.
"Make things easier, make things smoother. That's still a fundamental issue companies face."
He acknowledged recent progress in infrastructure, customs reforms, and supply chain facilitation but said sustained focus here would be critical to converting tariff advantages into real economic gains.
A Deal for an Uncertain World
In closing, Aghi reflected on the broader global disorder marked by weakening international norms and rising "might is right" geopolitics.
"This tells India you have to become self-sufficient and stronger economically and militarily. We are moving into a very uncertain world."
Against that backdrop, the US-India trade deal, he suggested, offers a rare moment of optimism.
"It's about people, technology, geopolitics – much bigger than trade," Aghi said. "Let's celebrate the 18 per cent and keep working to bring it down further."
