Security dependence, not trade policy, explains Washington’s speed with others, and why India is holding its ground
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Illustration: Binay Sinha
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Why has India not yet concluded a bilateral trade deal with the United States (US), even as the two countries have quickly signed agreements with other partners?
In just the last four years, India has concluded eight trade agreements — with Mauritius, the United Arab Emirates, Australia, New Zealand, Oman, the European Free Trade Association bloc, the United Kingdom (UK), and members of the Indo-Pacific Economic Framework (IPEF), which also includes the US.
Washington has also signed quick trade deals with Japan, the European Union (EU), the UK, South Korea, Thailand, Vietnam and Malaysia in the past six months. So why is an India-US deal taking longer?
Two main reasons: One, most countries that have concluded rapid trade deals with the US depend heavily on Washington for their security. India does not. Two, the US-India trade talks go far beyond trade and extend into strategic and policy areas of interest to Washington.
These two factors make the negotiations complex and explain why a deal is taking longer than many expect.
The US as a security provider: Most countries that have quickly concluded trade deals with Washington share one key trait: They depend on the US for their security.
Japan and South Korea, for example, are formal US treaty allies hosting large numbers of American troops. Their trade ties with Washington are closely linked to security dependence, especially given threats from North Korea and China.
The same pattern exists in Europe. The UK remains one of America’s closest strategic partners through the North Atlantic Treaty Organization. Much of the EU — particularly after Russia’s invasion of Ukraine — relies heavily on US military power for deterrence. In such cases, trade negotiations are shaped by strategic alignment, and resistance to US demands tends to be limited.
A similar dynamic operates in Southeast Asia. The Philippines, bound by a Mutual Defence Treaty, has expanded US military access in recent years. Thailand, another treaty ally, also remains embedded in the US security framework. For these countries, trade deals are part of a broader geopolitical bargain rooted in security dependence.
India stands apart. It does not rely on the US for its security and cannot be pressured through military leverage. That strategic autonomy fundamentally changes the nature of trade negotiations.
China also does not depend on US security and holds strategic leverage, particularly in critical minerals such as rare earths, which are vital to US defence and high-technology industries. As a result, US-China trade deals, however tense, are never one-sided. Power balance forces negotiation, not compliance.
Indo-US trade talks: More than trade: Negotiations for a US-India trade deal began in February 2025, but they remain stuck because the talks go far beyond trade. Washington is pushing India to reshape key domestic policies to suit US interests — ranging from regulation and technology to energy and geopolitics.
The US wants India to buy more American oil and defence equipment, relax data and digital rules, and distance itself from Brics partners — especially Russia and China, which Washington sees as challenging the dominance of the US dollar.
The US is also pressing for unrestricted cross-border data flows, an end to taxes on digital services, and permission for American e-commerce firms to run inventory-based models instead of limited marketplaces.
The pressure has gone further. Washington has pushed for Starlink’s entry into the Indian market to provide satellite-based internet services. The US has imposed an additional 25 per cent tariff on Indian exports in response to India’s purchases of Russian oil. It has not imposed similar penalties on China — the largest buyer of Russian oil — or on the EU, which continues to import several Russian products. The US is using trade tools for political pressure.
The broader relationship has also come under strain. Senior US officials increasingly criticise India in public. H-1B visa fees have risen. Many Indian professionals now face sudden visa cancellations when they travel home, followed by long re-interview delays that leave their jobs and families in the US in limbo.
India, meanwhile, has already made significant concessions. Over the past year, its oil imports from the US have risen nearly 80 per cent. It has adjusted aspects of its nuclear liability framework and allowed Starlink to begin operations, despite concerns that unrestricted satellite access could weaken sovereign control in sensitive areas. India has also removed the digital transaction tax.
On trade access, India has shown flexibility. It is willing to eliminate tariffs on nearly 95 per cent of US industrial exports and lower duties on products such as almonds, apples and avocados. Yet Washington continues to push for unrestricted access for dairy and genetically-modified crops, including corn and soybeans — an issue deeply sensitive in India due to environmental, political and social concerns.
Next steps: Even though both sides remain silent, and no details are public, it appears that negotiators have reached the limits of compromise, and the deal now awaits President Trump’s decision. The delay may be aimed at extracting further concessions from India.
India has already made many concessions. It should avoid offering more before an agreement is reached — otherwise, these will be absorbed and followed by new demands. However, India needs to make a clear choice on Russian crude. On January 4, President Trump warned that US tariffs on Indian exports could rise unless New Delhi halts purchases of Russian oil. While Indian refiners have signalled an intent to curb buying, Russian oil continues to flow, accounting for 7.7 million tonnes — or about 35 per cent of India’s crude imports —in November.
With exports to the US down 20.7 per cent over the past six months, this strategic ambiguity is no longer cost-free. If India intends to exit Russian oil, it must do so decisively; if it plans to continue buying from non-sanctioned suppliers, it should state that openly and support the case with data; and if it chooses to buy even from sanctioned entities, that position too must be articulated clearly. As the tariff threat hardens, India must take a clean call on Russian oil — own that decision, and communicate it unambiguously to Washington.
Complicating India’s calculus is the absence of any guarantee that cutting Russian oil will end US pressure. Even a complete halt to Russian oil could only shift the US demands to agriculture, dairy, digital trade, and data governance.
A trade deal makes sense only if it is fair and reciprocal. If the cost is strategic dependence or loss of policy space, waiting is the wiser option.
The author is the founder of GTRI
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