Right Word | Beyond Tariffs: The India-US Deal Is About Statecraft, Not Statistics

Last Updated:February 17, 2026, 13:52 IST

This deal is not about who won. It is about halting strategic drift, buying time in a fractured global order, restoring momentum.

The debate on the India-US trade agreement has so far focused narrowly on tariffs and concessions, missing the larger picture. This is not a routine commercial deal but a strategic intervention shaped by geopolitical flux, rising protectionism and great-power rivalry.

Trade today is an instrument of statecraft. To judge this agreement meaningfully, it must be seen not as a tally of gains and losses, but as a component of India’s broader geopolitical positioning and long-term room for manoeuvre.

A Strategic Reset

The India-US trade agreement is best understood not as a transactional settlement but as a relationship reset under constraint. After a year marked by tariff escalation, legal disputes and strategic drift, both sides reached a point where the costs of non-engagement were beginning to outweigh the costs of compromise. The agreement does not claim to resolve all frictions; rather, it stabilises the relationship before mistrust hardens into structural divergence.

It is important to understand that this deal might not be a full free-trade agreement. It is a limited and flexible arrangement, made to work under current geopolitical realities. The US cannot offer long-term certainty because its policies change often, while India prefers flexibility to protect its own options. Thus, the deal is shaped in a particular way on purpose, because it suits both sides for now.

One must remember how quickly bilateral frictions create openings for third parties. The cooling of India-US ties created opportunities for other global powers. Seen in this light, the deal is an effort to reclaim strategic time lost during a period of drift.

Unresolved trade disputes had begun to introduce drag across other priority areas—critical minerals, aluminium, nuclear energy, defence innovation and advanced manufacturing. The agreement should therefore be interpreted as removing a blockage, restoring momentum in domains where co-operation already exists but requires a minimum level of economic trust.

It needs to be understood that big headline commitments on defence, energy or purchases are not meant to be met immediately or literally. The real purpose of these commitments is to show the direction of policy and give businesses confidence about future co-operation, rather than to chase fixed numbers right away.

Recalibration As Constraint Management

In the context of this deal, India’s evolving energy posture is to be viewed through the lens of macroeconomic adjustment, not ideological realignment. Russian oil imports have declined to multi-year lows, but full elimination would be destabilising rather than prudent. The agreement accommodates this reality. In this context, gradual diversification, rather than abrupt rupture, should be viewed as a sign of policy credibility and durability.

There are valid concerns about labour standards and various other regulations. However, trade deals are not granted only to perfect partners. They are tools used to guide behaviour and manage interests in real-world conditions. Seen this way, this agreement is neither a surrender nor a victory, but a practical decision taken under constraints.

How India handled the negotiations matters as much as the outcome. By resolving differences through sustained negotiation rather than confrontation, India has reinforced its image as a serious and reliable partner. While tariff relief helps small exporters at home, the larger message is strategic. India chose engagement to protect its influence, rather than stepping back and weakening its position.

The deal fits squarely within the logic of competitive liberalisation. India’s parallel engagement with Europe altered negotiating dynamics by signalling that access to the Indian market could no longer be taken for granted. American industry, increasingly sensitive to supply-chain positioning and future competitiveness, recognised that delay carried its own strategic costs.

Trade As Geopolitics

Viewed alongside India’s broader trade diplomacy, the agreement forms part of a layered hedging strategy. India is neither pivoting decisively towards Washington nor attempting to replace one dependency with another. Instead, it is embedding itself across multiple demand centres and production ecosystems, raising the cost of coercion without foreclosing options.

Today, trade is no longer just about economics; it is used as a tool of power. Tariffs and access to markets now decide where supply chains shift and which relationships grow closer. India recognises this reality. This agreement is meant to reduce risks and protect India’s interests, not to signal loyalty to any one country.

Predictability Vs Scale

Recent trade deals indicate that India’s trade strategy will operate on two complementary tracks. Europe would offer institutionalised predictability; the United States would offer scale and demand absorption. Neither is a substitute for the other. Together, they expand India’s room for manoeuvre in an era defined by American unpredictability and Chinese industrial dominance.

India’s real challenge is building long-term capabilities, not just negotiating lower tariffs. Trade with the US helps bring in investment, technology, global standards and manufacturing experience. These benefits take time to show results, but they are crucial for India’s long-term economic and strategic strength.

Strategic Takeaway

For Washington, India remains central to Indo-Pacific strategy and the Quad framework. For India, access to investment, technology and large markets remains essential for building long-term economic and industrial strength. The agreement reflects mutual necessity, not sentiment.

This deal is not about who won. It is about halting strategic drift, buying time in a fractured global order, restoring momentum and embedding India more deeply into multiple centres of economic gravity. In an era where trade has become power and power is increasingly volatile, this deal is not about weakness or strength, but about statecraft.

(The writer is an author and columnist. His X handle is @ArunAnandLive. Views expressed are personal and solely those of the author, and do not necessarily reflect News18’s views.)

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