Signing a trade deal with the United States right now feels like trying to build a house on shifting sand. You might get the keys today, but there's no telling if the roof will be there tomorrow. Former Ambassador Mohan Kumar hit the nail on the head when he warned that India shouldn't finalize any major trade agreement without absolute clarity on the future of US tariff powers. It’s not just about the numbers on the page; it's about who holds the eraser.
The current atmosphere in Washington is volatile. We’ve seen a relentless push for "reciprocity," which in plain English means the US wants to match every tax India levies. But here’s the kicker: the legal ground for these tariffs is constantly moving. If New Delhi signs a deal based on today’s Executive Orders, those terms could vanish the moment a court rules against them or a new policy shift occurs. India needs more than a handshake; it needs a legal fortress. Building on this topic, you can find more in: The Childcare Safety Myth and the Bureaucratic Death Spiral.
The trap of executive overreach
The biggest risk for India isn't just the height of the tariffs, but the authority used to impose them. We’ve recently seen the US Supreme Court step in to strike down broad import duties that were pushed through via the International Emergency Economic Powers Act (IEEPA). The court essentially told the administration they’d overstepped.
While that sounds like a win for free trade, it actually creates a massive vacuum of uncertainty. If the US President's "emergency" powers are clipped, what happens to the "special deals" negotiated under those same powers? For India, this is a red flag. If we agree to stop buying Russian oil or lower our own barriers on American apples and almonds in exchange for a tariff cut, we need to know that the US side of the bargain is legally bulletproof. Observers at Harvard Business Review have also weighed in on this matter.
Why the Russian oil factor complicates everything
The US has been very vocal about wanting India to ditch Russian crude. The proposed trade deal allegedly includes a trade-off: India cuts back on Russian oil, and in return, the US slashes tariffs on Indian goods from a staggering 50% down to about 18%.
On paper, it looks like a fair swap. But look closer. Energy security isn't something you gamble with. Indian refiners are set up for specific grades of crude, and shifting entirely to US or Venezuelan oil involves massive logistical headaches. If India makes this monumental shift and then the US administration decides to invoke "Section 232" national security duties or "Section 301" unfair trade practices anyway, India loses twice. We lose our cheap energy source and we still get hit at the border.
The hidden reality of Section 232
You'll hear people talk about "reciprocal" duties, but Section 232 is a different beast. These are tariffs justified by "national security." Even when the US announces a big trade deal, these specific duties often stay in place. Union Commerce Minister Piyush Goyal has already hinted that some of these 50% tariffs on steel and aluminum might not budge because they aren't considered "reciprocal."
This is exactly what Mohan Kumar is talking about. If the US keeps its most potent weapons in the shed while asking India to disarm its own protections, it's not a deal—it’s a surrender.
Protecting the Indian farmer is non-negotiable
The US has a massive agricultural trade deficit with India, and they're hungry for market access. They want to flood the Indian market with dairy, poultry, and grains. But for India, agriculture isn't just business; it's a survival mechanism for half the population.
In the US, farming is industrial. In India, it's millions of small-scale farmers with an acre or two. If we open the floodgates without specific, iron-clad guarantees that the US won't suddenly slap "anti-dumping" duties on our textile or pharma exports later, we’re putting our rural economy at risk.
The volatility of 150-day rules
One of the weirdest parts of current US trade policy is the "150-day rule" under Section 122 of the Trade Act of 1974. This allows the President to slap on a temporary 15% tariff for about five months without asking Congress. After that, they need permission.
Think about how that disrupts a business. An Indian smartphone manufacturer or a garment exporter can't plan a yearly budget if the rules change every 150 days. A trade deal that doesn't solve this "policy by whim" isn't worth the paper it's printed on. We need to move beyond "Executive Orders" and get these terms codified into something the US Congress actually backs.
Stop the rush and demand the fine print
There's a lot of political pressure to announce a "historic win." Both sides want the photo op. But the "fine print" that hasn't emerged yet is where the danger lies.
- Refunds on past duties: If the US courts have ruled some previous tariffs illegal, will Indian companies get their money back?
- Definition of "Digital Trade": The US is pushing for rules that might prevent India from taxing big tech. That's a huge revenue loss for New Delhi.
- Rules of Origin: We need to make sure the benefits actually go to Indian and American companies, not third parties funneling goods through the back door.
The smart move for India is to wait. We've managed to grow our exports despite the chaos of the last few years. Our rupee has taken some hits, but the Reserve Bank of India (RBI) has kept enough foreign exchange reserves—nearly $700 billion—to act as a buffer. We aren't desperate.
If the US wants us to be their primary strategic partner in Asia, they need to treat us like one. That means giving us predictable, long-term trade rules, not a series of 150-day experiments. Don't sign anything until those tariff powers are clearly defined and the "national security" excuse is off the table for good.
Before moving forward, the government should demand a legal audit of the US President's current tariff authorities to see which ones are likely to survive the next round of court challenges. We also need a clear "snap-back" clause: if the US raises a single tariff in violation of the deal, India must have the immediate right to restore its own protections without further negotiation.
