India-US trade deal: Fine print separates fear from facts
Feb 9, 2026
Synopsis
India and the US have announced an interim trade framework. Government officials clarify that a projected $500 billion in purchases from the US is an intention, not a binding commitment. India's strategic autonomy in energy sourcing and protection for its agriculture sector remain intact. Trade decisions will be guided by commercial logic.
The interim trade framework announced between India and the United States has been projected by the government as an achievement in bilateral economic ties after nearly a year of protracted negotiations. However, the announcement also triggered sharp political and policy scrutiny in India, with critics questioning whether the framework tilts disproportionately in favour of the US. The scepticism has centred on three core issues -- the headline figure of $500 billion in proposed purchases from the US; concerns about India’s continued import of Russian crude oil; and the potential fallout for Indian agriculture.
In interviews to The Times of India and ANI, Union commerce and industry minister Piyush Goyal sought to address these apprehensions by explaining the fine print of the framework. His central argument is that the agreement reflects intent rather than obligation, preserves India’s strategic autonomy and does not compromise domestic economic or agricultural interests.
$500 billion: Projection, not compulsion
The most politically charged aspect of the interim framework has been the reference to India’s intention to increase purchases of US goods to $500 billion over five years. This figure has been interpreted by critics as a binding commitment that would force India into annual imports of roughly $100 billion from the US, potentially crowding out other suppliers and harming domestic producers.
Goyal categorically rejected this interpretation. He clarified that the figure represents a broad estimate based on India’s expanding economic needs and the areas where US suppliers are globally competitive. “There is no such limitation,” he said, underlining that India is under no legal or contractual obligation to import fixed quantities or values of American goods. According to him, the interim understanding does not mandate any compulsory purchases, nor does it lock India into annual targets.
Trade decisions, he emphasised, will continue to be guided by commercial logic of price, quality and demand. “We don’t have to. We intend to procure certain equipment,” Goyal said, making a clear distinction between intention and enforceable commitment. The government’s position is that India will buy from the US only where it makes economic sense.
Why the number appears large but isn’t unrealistic
Though there is no committment for India to buy US goods worth $500 billion in next five years, Goyal also explained that when viewed against the backdrop of India’s economic trajectory, the $500 billion figure is not extraordinary. India’s fast-growing economy is expected to see a sharp rise in imports across multiple sectors, irrespective of the US trade framework.
In steel, for instance, India’s production capacity is projected to expand from about 140 million tonnes to nearly 300 million tonnes in the coming years. This expansion will significantly raise demand for coking coal, most of which India imports. Currently, coking coal imports for steel-making are worth around $17 billion annually, but Goyal said this figure could rise to $30–35 billion per year as capacity grows. Diversifying suppliers, including the US, would strengthen India’s negotiating position. “If we have one or two more countries supplying that, the more the merrier. We get a better deal. We can negotiate smarter and better,” he said.
Civil aviation is another sector driving large import numbers. India already has aircraft orders worth around $50 billion with Boeing, along with substantial purchases of engines and spare parts. Goyal estimated that total aviation-related imports could touch $80-100 billion in the coming years. These purchases are part of India’s civil aviation expansion and are not connected to defence procurement, which he clarified is excluded from trade discussions.
Energy imports will also continue to rise steadily as India’s demand for crude oil, LNG and LPG grows year after year. In parallel, emerging sectors such as data centres, artificial intelligence and quantum computing are expected to dramatically increase India’s demand for information and communication technology products. India currently imports around $300 billion worth of such products annually, but Goyal said this could rise to as much as $2 trillion over the next five years. The US, with its technological strengths, is well placed to supply part of this demand, provided it offers competitive pricing.
Even in this context, Goyal reiterated that India’s intent to purchase does not amount to a binding obligation. “We hope they will offer us very competitive prices. We intend to purchase a good volume of these products out of our $2 trillion imports. But the intent is different,” he said, seeking to defuse the political controversy around the headline number.
Russian oil: Strategic autonomy remains intact
Another concern raised by critics was whether the interim trade framework constrains India’s ability to continue importing discounted Russian crude oil. Goyal firmly denied any such linkage. He stated that decisions on crude oil imports are made by domestic buyers and fall outside the purview of the commerce ministry.
“I don’t deal with that,” he said when asked whether the framework affects India’s approach to Russian oil, adding that such matters are handled by the Ministry of External Affairs. While ministries coordinate on broader policy issues, domain-specific decisions remain with the relevant departments.
At the same time, Goyal emphasised that diversification of energy sources, including LNG and oil from multiple suppliers, is in India’s long-term strategic interest. This, however, does not mean abandoning existing sources. The interim trade framework, he stressed, does not dictate or restrict India’s energy sourcing decisions in any way.
Agriculture: Safeguarding sensitivities while meeting demand
Agriculture has traditionally been one of India’s most sensitive areas in trade negotiations, and the interim framework has sparked fears of increased imports undermining domestic farmers. Goyal said the government has been aggressive in pushing India’s farm interests while carefully protecting vulnerable sectors such as dairy and key agricultural products.
A major flashpoint has been the proposed import of distillers dried grains with solubles (DDGS), a by-product of ethanol production used as animal feed. Critics have argued that cheaper DDGS imports from the US could hurt Indian soybean farmers. Goyal dismissed these concerns as overstated, stressing that India has opened only a very limited window for such imports.
While he declined to disclose precise figures, officials said that against domestic animal feed consumption of around 500 lakh tonnes, the quota offered to the US is just five lakh tonnes. The demand for DDGS, Goyal explained, originated from the domestic industry itself, driven by a rapidly rising livestock population and increasing feed requirements at a time when arable land is shrinking.
“As regards DDGS, we have a huge requirement, and it is growing. What we have agreed to is a very small quota,” Goyal said. He added that the animal husbandry department and industry desperately want more DDGS because of its high protein content. India currently has 194 million cattle, 112 million buffaloes and a total livestock population of 878 million. “As a govt, I have to balance all interests,” he said.
Soybeans, imports and the reality of competition
On the specific concern that DDGS imports could undercut soybean farmers, Goyal insisted that soybeans have been adequately protected. He also pointed out that India already imports around $5 billion worth of soybean oil every year, a practice that predates the current government. If market access has been opened to countries such as Indonesia, Japan, South Korea or Vietnam in the past during the UPA government, he argued, then allowing more competition can actually result in better prices and quality for consumers.
“If something was opened by UPA, let’s say for Indonesia or Japan or South Korea or Vietnam, I would rather have more competition as it gets me better price and better quality,” he said.
Goyal also noted that there are very few agricultural items where farmers can realistically feel threatened by imports. Import data, he said, shows that India has long been importing products such as soybean oil and tree nuts. He rejected the notion that India has arbitrarily shut its doors to certain products, pointing out that wines and spirits, fresh fruits and processed foods are imported where domestic availability is insufficient. India, for instance, imports about 5.5 lakh tonnes of apples annually. “There are certain items which India needs,” Goyal said, arguing that controlled and calibrated imports are a pragmatic response to domestic supply gaps rather than a threat to farmers.
Reading the fine print
Goyal’s explanations present the interim India-US trade framework as a flexible, intent-based understanding rather than a binding deal that compromises India’s economic sovereignty. The $500 billion figure, he argues, is a reflection of India’s growth ambitions, not a compulsory shopping list. Energy sourcing remains firmly under India’s strategic control, and agricultural sensitivities, particularly around dairy and key crops, have been protected through quotas and careful calibration.
From the government’s perspective, the fine print reveals continuity rather than disruption. Whether this interpretation convinces sceptics remains to be seen, but the minister’s defence makes clear that the framework, as negotiated, does not lock India into outcomes that harm its core economic or agricultural interests.
(With inputs from TOI and agencies)
[The Economic Times]
