THE 2026 India-US interim trade deal, while touted as a diplomatic breakthrough, has faced significant criticism for appearing lopsided, with reports indicating that the United States has gained substantial market access and strategic concessions, while India has made compromises that may harm its domestic industries. The deal, which came after a period of intense trade friction, has been described by some as an “unequal trade deal” or a “pre-committed purchase agreement” that favours US interests.
India has agreed to a long-term plan to purchase over $500 billion worth of US goods over the next five years, including energy products, aircraft, coal, and technology, which critics argue is a heavy burden to balance trade.
India has agreed to reduce or eliminate tariffs on a wide range of US industrial and agricultural products, including dairy, poultry, and fruit. This has raised concerns among domestic farmers and small manufacturers who fear being undercut by cheaper, subsidised American products.
The deal was tied to India’s commitment to reduce or halt its oil imports from Russia, which were previously a cost-effective option for India. This move, forced by the US imposing 50% punitive tariffs, was seen as a way for the US to compel India’s foreign policy and economic decisions.
Analysts argue that India has agreed to “reciprocal tariffs” that may remain in place, making it difficult to protect domestic industries in the long run. While some sectors, such as textiles and footwear, received a reprieve from high tariffs, they still face an 18% tariff, which is considered high compared to competitors like Vietnam and Bangladesh.
From a Left perspective—represented by groups such as the Communist Party of India (Marxist) [CPI(M)], various trade unions, and farmer organisations like the Sanyukt Kisan Morcha (SKM)—the recent (February 2026) Indo-US interim trade deal is viewed as a “shameful surrender” and an “unequal treaty”.
A Left-perspective
Left analysts argue that the deal is driven by US imperialism, designed to force India to abandon its strategic autonomy and open its domestic market to US multinationals, particularly in agriculture and energy. The Left views this as the biggest loser.
The deal is expected to allow the dumping of highly subsidised US agricultural products (soybean oil, pulses, dairy, fruits) into India, threatening the livelihoods of millions of small farmers who cannot compete with American agribusiness.
Critics argue the deal dictates Indian foreign policy, forcing a reduction in affordable Russian oil imports and threatening the imposition of punitive tariffs if conditions are violated. The reduction of tariffs on US industrial goods is expected to expose Indian MSMEs to unfair competition, threatening local manufacturing and employment.
Consumers fear that the reliance on more expensive US energy and goods will reverse recent inflation, increasing the cost of living. US corporations gain unprecedented access to the Indian market, especially in agriculture, technology, and defense, without facing significant reciprocal barriers in key areas.
The deal serves as a tool to shift India’s supply chains away from China and decrease India’s economic reliance on Russia. While overall sceptical, some analysts note that specific export sectors like textiles, seafood, and gems/jewellery get relief from punishingly high US tariffs, providing short-term gains for these specific, often organised, sectors.
Large firms with strong ties to US importers may benefit from easier market access, while the costs are socialised among small producers. Significant Import Commitments: India has agreed to a long-term plan to purchase over $500 billion worth of US goods over the next five years, including energy products, aircraft, coal, and technology, which critics argue is a heavy burden to balance trade.
Geopolitical Concessions (Energy): The deal was tied to India’s commitment to reduce or halt its oil imports from Russia, which were previously a cost-effective option for India. This move, forced by the US imposing 50% punitive tariffs, was seen as a way for the US to compel India’s foreign policy and economic decisions.
Permanent “Reciprocal” Tariffs: Analysts argue that India has agreed to “reciprocal tariffs” that may remain in place, making it difficult to protect domestic industries in the long run.
Minimal Gains for Indian Labor-Intensive Sectors: While some sectors, such as textiles and footwear, received a reprieve from high tariffs, they still face an 18% tariff, which is considered high compared to competitors like Vietnam and Bangladesh.
The Left perspective considers this a “Trojan Horse” deal, where minor concessions on tariffs for Indian goods are traded for the dismantling of India’s protective agricultural and industrial policies, rendering the Indian economy subservient to US corporate interests.
Farmers and agricultural unions often view such agreements as a form of “neo-colonialism” that prioritises corporate interests over food sovereignty, particularly when it forces them to compete with highly subsidised, large-scale agribusiness from developed nations.
Farmer’s perspectives on the “unjust” trade deal
An “unjust” deal is often seen as weakening the regulatory firewalls that protect domestic agriculture.
Farmers worry that reduced tariffs allow cheaper foreign agricultural products to flood the local market. High-quality, subsidised imports (e.g., US apples, soybean oil, pulses) will make it impossible for local farmers to sell their produce at a fair price. This creates a “domino effect” where local margins shrink, leading to increased debt and potential bankruptcy, especially for smallholders.
Farmers and economists warn that lowering non-tariff barriers can allow inferior, or even health-hazardous, food products into the country. There is deep concern that agreements force the entry of genetically modified (GM) crops or products derived from them (e.g., soybean meal), which threatens local biodiversity and traditional farming.
Farmers often feel the government is sacrificing their interests for gains in other sectors (like IT or manufacturing). The sentiment is that while farmers are the backbone of the economy, their livelihoods are treated as disposable in exchange for international goodwill or geopolitical alignment. Many believe these deals are negotiated without enough consultation with the farming community.
Different farming sectors raise specific anxieties: Growers (e.g., in Kashmir) fear that easier imports will collapse local fruit prices. Local producers of mustard, soy, and lentils feel particularly vulnerable to cheaper imports. Concerns that large-scale foreign dairy imports will threaten the livelihoods of millions of small dairy cooperatives.
Instead of supporting self-reliance, critics argue that trade deals foster a, “permanent dependency” on foreign imports for essential food items. If farmers cannot compete and are forced to stop producing certain crops, the nation loses its capacity to feed itself in key areas.
It is important to note that governments often defend these deals as “balanced” or “protected.” Officials claim they have excluded the most sensitive items (like dairy, or specific local staples) from tariff cuts. The government argues that these deals help other parts of the agricultural sector access, for example, the US market.
In response to what they view as an “unjust” deal, farmer unions (such as the Samyukt Kisan Morcha) typically respond with:
· Marching, blocking highways, and burning effigies to signal a surrender” of national interest
· Demanding a boycott of foreign imports and a return to “self-reliant” agriculture.
Ultimately, this interim trade framework acts as a modern-day unequal treaty, revealing a troubling subservience to Washington’s coercive trade policies. By sacrificing the strategic autonomy of the Global South for a fleeting, asymmetrical deal, India’s ruling dispensation has signalled a retreat from a self-reliant economy, favouring the interests of American multinationals and the Indian big bourgeoisie over the livelihoods of its own working class. True development cannot be bought through the erosion of sovereignty; it must be fought for by breaking free from, rather than deepening, these neo-colonial economic shackles.
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Ranjan Solomon is a writer, researcher and activist based in Goa. He has worked in social movements since he was 19 years of age. The views expressed here are the author’s own and Clarion India does not necessarily share or subscribe to them. He can be contacted at ranjan.solomon@gmail.com
