India–US Trade Deal Is Not Reciprocal but a ‘Pre-Committed Purchase Agreement’: Shashi Tharoor
PTI
New Delhi: Congress MP Shashi Tharoor on Tuesday launched a sharp attack on the government over the India–US interim trade agreement, describing it as a “pre-committed purchase agreement” that overturns the basic principle of reciprocity in international trade.
Speaking in Parliament, the Thiruvananthapuram MP said the deal cannot be called reciprocal when Indian exports continue to face tariffs of up to 18 per cent in the United States, while American exports to India enjoy near-zero duties. He questioned how such an arrangement could be portrayed as mutually beneficial.
Tharoor said that while the government has highlighted tariff reductions of one or two percentage points for Indian goods, no East Asian economy has ever agreed to dilute its trade surplus with the United States through guaranteed purchase commitments. He argued that this alone sets India apart in an unfavourable manner.
Referring to India’s bilateral trade with the US, currently estimated at around USD 130 billion with a surplus of nearly USD 45 billion in India’s favour, Tharoor said the government has committed to purchasing USD 500 billion worth of American goods over the next five years. According to him, this would convert a healthy trade surplus into a structural deficit, not through market forces but through executive assurances.
“This is not strategic balancing; it is economic pre-emption,” Tharoor said, arguing that no major economy has voluntarily neutralised its own trade leverage in such a manner.
He also alleged that while the US continues to impose tariffs of up to 18 per cent on Indian exports, India has agreed to lower its own tariffs, open up sensitive agricultural sectors, dilute data localisation norms, soften intellectual property safeguards, and redirect strategic energy imports, particularly away from Russia, to meet purchase targets under the agreement.
Tharoor questioned why Parliament had not been informed about how Indian farmers, MSMEs and domestic industry would be protected under the proposed framework. He said lawmakers were being asked to approve a Union Budget without clarity on the obligations arising from the trade deal.
“The government will say, wait for the final agreement in mid-March. But these concerns exist right now,” he said, adding that Parliament has a right to know the scale, timeline and fiscal implications of the commitments being made.
Rejecting comparisons with other Asian economies, Tharoor said claims that India had secured a better deal than China, Vietnam or ASEAN nations did not stand up to scrutiny. He pointed out that despite trade tensions, China and several Southeast Asian economies have continued to expand their trade surpluses with the US, without committing to guaranteed purchase volumes.
He also raised concerns over what he described as a lack of accountability within the government. Tharoor said that when questions were raised, Union ministers S Jaishankar and Piyush Goyal deflected responsibility by claiming the matter did not fall within their respective mandates.
“When two ministers play ping pong with each other, each attributing responsibility to the other, accountability disappears,” Tharoor said, adding that Parliament was being left to scrutinise a Budget that conceals obligations the government appeared unwilling to acknowledge openly.
Last week, India and the United States announced a framework for an interim trade agreement described by the government as reciprocal and mutually beneficial. Under the framework, the US agreed to reduce reciprocal tariffs on Indian goods from 25 per cent to 18 per cent, while lifting the additional 25 per cent duty imposed last year over India’s purchase of Russian crude oil.
The Congress, however, has alleged that the interim trade pact amounts to a surrender of India’s economic interests rather than a balanced agreement.
Our Thoughts
Shashi Tharoor’s intervention places the India–US interim trade deal under intense parliamentary scrutiny at a time when fiscal planning and external trade assumptions are deeply intertwined. His critique highlights a broader concern about transparency, accountability and the long-term strategic cost of executive-level trade commitments. Whether the government can convincingly demonstrate proportional market access and safeguards for domestic sectors will determine if the deal is remembered as pragmatic diplomacy or as a moment when leverage was conceded without adequate debate. For Parliament, the issue goes beyond tariffs to the principle of informed consent in economic policymaking.