Express view on India-US relation: Hope ties with US hit reset, but hope isn’t strategy

US Commerce Secretary Howard Lutnick’s statement attributing the stalling of the India-United States bilateral trade agreement to Prime Minister Narendra Modi not placing a “call” to President Donald Trump, when the deal was “all set up”, is specious, to say the least. India was transparent about its concerns over allowing greater market access for American farm produce. It had clearly spelt these out, rightly or wrongly, as red lines in any trade deal. USTR Jamieson Greer flagged India’s offer as “forward-leaning” and “best ever.” Yet, the Trump administration, has been mercurial and unreasonable in clamping a 50 per cent tariff on goods imports from India, inclusive of a 25 per cent “penalty” for its purchases of Russian oil. There is a proposal for further raising the punitive duty to “at least 500 per cent” under a Sanctioning Russia Act, which is said to have received Trump’s support.

All this and now the senior US official’s claims, add insult to injury. More significantly, though, they point to the need for dialling down expectations — which the markets are already doing. Both the Sensex and Nifty fell 2.5 per cent last week, even as foreign portfolio investors have pulled out over $1.3 billion from Indian equity markets so far this month, on top of $18.9 billion in 2025. The rupee, too, closed at 90.16 to the US dollar on Friday. The renewed worries over US tariffs and progress in trade talks — not helped by the Republican Senator, Lindsey Graham’s, Russia sanctions bill and Secretary Lutnick’s remarks — and geopolitical tensions in Iran and Venezuela have contributed to an overall uncertain external environment. This comes amid an apparent “Goldilocks moment” on the domestic economy front, with an estimated GDP growth of 7.4 per cent for 2025-26, retail inflation at sub-1 per cent, multi-decade low bad loans of Indian banks, and healthy corporate balance sheets along with improved earnings and revenues.

Overall Analysis

The editorial takes a critical and realist view of the current state of India–US economic relations, arguing that optimism alone cannot substitute for a clear-headed strategy. It begins by questioning the credibility of the US Commerce Secretary’s claim that a stalled trade deal was due to a lack of personal outreach by India’s Prime Minister. The use of the word “specious” immediately signals skepticism and frames the statement as misleading rather than factual.

The author then methodically lays out India’s position, stressing that New Delhi was transparent about its non-negotiables, especially regarding market access for American agricultural products. By contrasting this clarity with the Trump administration’s “mercurial and unreasonable” conduct, the editorial portrays US trade policy as erratic and punitive. The language here is assertive, highlighting the imbalance between India’s openness in negotiations and the sudden imposition of steep tariffs and penalties.

In the second half, the focus shifts to economic consequences. The editorial broadens its scope from diplomacy to markets, showing how uncertainty in India–US relations has tangible effects on investor sentiment, stock indices, capital flows, and the currency. This section adopts a data-driven tone, using figures to underline the seriousness of external shocks.

The final contrast is rhetorical and strategic: despite strong domestic fundamentals — described as a “Goldilocks moment” — external instability driven by US trade unpredictability and global geopolitical tensions continues to cloud India’s outlook. The editorial’s central message is clear: while hope for improved ties is understandable, India must anchor its foreign economic policy in realism, preparedness, and diversification rather than emotional or symbolic expectations.

Important Vocabulary (5)

1. Specious – seemingly plausible but actually misleading or false.
2. Mercurial – unpredictable; prone to sudden changes in mood or policy.
3. Punitive – intended to punish or impose a penalty.
4. Conflate – to combine two distinct things as if they were the same.
5. Goldilocks moment – an economic phase that is neither too hot nor too cold, but ideally balanced.

Conclusion & Tone

The editorial concludes that India cannot rely on personal diplomacy or optimism to manage relations with an increasingly unpredictable United States. It calls for tempered expectations and a pragmatic strategy that accounts for volatility in US policy and global geopolitics.

Tone: Critical, pragmatic, and cautionary — grounded in realism rather than rhetoric.