When US President Donald Trump announced that Washington would slash its punitive 25% “reciprocal” tariff on Indian goods to 18%, he presented it as a win-win breakthrough. Prime Minister Narendra Modi thanked him for the relief. But behind the optics of diplomatic triumph, a political storm was gathering at home.
What the two governments have agreed to so far is not a full free trade agreement but a “framework” for an interim pact, the first step toward a broader bilateral deal. Even this preliminary outline has triggered one of the sharpest political backlashes in the country. Opposition parties call it a “surrender.” Farmers’ unions warn of another mass uprising. On Feb. 12, nationwide protests spilled onto highways and into mandis and district headquarters across India.
At the core of the controversy is a simple question: what has India conceded in return for tariff relief?
The Oil Question
Energy is the most sensitive flashpoint. Alongside the tariff cut, Trump signed an executive order withdrawing a 25% penalty imposed on India for buying Russian oil. He claimed India had agreed to stop importing Russian crude, and to step up purchases of American energy.
The government has been cautious. Officials have reiterated that India’s energy sourcing depends on diversification and market conditions. Commerce Minister Piyush Goyal declined to confirm any commitment to halt Russian imports. No formal public pledge has been made.
Yet the stakes are high. Since the Ukraine war began, India has become one of Russia’s largest crude buyers, leveraging discounted prices to contain inflation. Switching to American oil, significantly costlier, could swell the import bill by billions and feed inflationary pressures.
Critics recall 2019, when India halted oil imports from Iran and Venezuela under US pressure during Trump’s earlier term. The issue, they argue, is not just about oil; it is about strategic autonomy.
The Tariff Imbalance
If oil raises geopolitical concerns, tariffs have ignited economic alarm.Under the framework, the US will cut its tariff on Indian goods to 18%. In exchange, India will eliminate or sharply reduce tariffs on American industrial products and a broad swathe of agricultural goods, including distillers’ dried grains (DDGs), soybean oil, fruits, tree nuts.
Critics highlight what they see as a stark imbalance: 18% tariffs on Indian exports versus near-zero tariffs on US imports. Economist Prof Prabhat Patnaik has described the arrangement as an “unequal treaty,” unprecedented in post-Independence India. Prof Patnaik further said: “It amounts to the US adopting a “beggar-thy-neighbour” policy where the “neighbour” who is being reduced to the status of a “beggar” actually signs an agreement consenting to being reduced to such a status.
The framework reportedly includes a commitment for India to purchase $500 billion worth of American goods over five years – energy, aircraft and technology among them. Analysts note that this figure approaches 85% of the Union government’s annual expenditure, signalling a massive realignment of trade flows.
Imports from the US currently stand at roughly $40 billion annually. Raising that to $100 billion a year, critics argue, would likely require replacing Russian crude with American supplies, an outcome the government can directly engineer.
Farmers on the Warpath
If oil has stirred policy circles, agriculture has ignited the streets.Provisions allowing greater access for US agricultural imports have drawn fierce opposition from the SamyuktKisanMorcha, which led the 2020–21 farmers’ movement. SKM warns that including agriculture and dairy in the final agreement could trigger protests on the scale of the agitation that forced the repeal of three farm laws.
On Feb. 12, SKM and allied groups organised nationwide demonstrations, calling the framework a direct threat to India’s 172 million rural households. With 86% of farmers classified as small and marginal, unions fear subsidised US products will undercut domestic producers. SKM said that the Framework was an abject rejection of the claim of the Commerce Minister that the agriculture and dairy sectors are out of the Free Trade Agreements and the GoI will not make any compromise on the interests of agriculture. Dairy products are part of the FTAs signed with the UK, New Zealand and EU and fresh revelations have undoubtedly proved the Commerce Minister is consciously propagating falsehood and betraying farmers and the entire people.
Soybean oil, cotton, apples and animal feed like DDGs and sorghum are among the chief concerns. States such as J&K, Himachal Pradesh and Maharashtra could be particularly exposed. Farmer leaders argue that zero-tariff imports would leave Indian agriculture vulnerable to multinational corporations. They underlined that the elimination of import duty on cotton has dealt a severe blow to the livelihood security of lakhs of cotton-growing households. Cotton imports from the United States surged by 95.5%, rising from $199.30 million in Jan.–Nov. 2024 to $377.90 million during the same period in 2025. Wheat and soybean oil imports also recorded a sharp increase, intensifying concerns over mounting pressure on domestic farmers.
The government maintains that sensitive sectors like dairy are excluded. But US officials have publicly hailed expanded access to India’s vast market, and unions point out that other recent trade agreements have included dairy components.
Meanwhile, domestic pressures mount. Cotton imports from the US have surged after the removal of an 11% import duty. Minimum support prices continue to trail comprehensive cost estimates, and the 2021 assurance to guarantee MSP at C2+50% remains unfulfilled.
A Political Flashpoint
Opposition parties have seized the moment. Already emboldened by controversies surrounding the Epstein files and former Army chief MM Naravane’s memoir Four Stars of Destiny, which rattled the Budget session, they described the trade framework as another instance of executive overreach.
Congress spokesperson Pawan Khera termed it a “deal at gunpoint,” alleging coercion and opacity. He argues that tariffs have effectively risen – from 3% before Trump’s punitive measures to 18% now – despite official claims of relief.
Left parties have been sharper still. The CPI(ML)-New Democracy calls it a “shameless surrender” to US corporate interests, likening it to the economic opening of 1991.
For critics, the framework fits into a broader pattern: recent free trade agreements, customs duty reductions in the Union Budget, and labour reforms seen as pro-corporate. The fear is that Indian markets may become dumping grounds for foreign goods, squeezing MSMEs and small manufacturers.
A Widening Divide
Supporters argue that deeper integration with the US, the world’s largest economy, promises long-term gains. Exporters may benefit from lower American tariffs, and enhanced energy and technology ties could spur growth. The stock market’s early enthusiasm reflects investor confidence.
Detractors see a widening divide. Big corporations and globally mobile professionals may benefit from closer ties with Washington. Farmers, small manufacturers and informal workers will bear the adjustment costs – through higher prices, tougher competition and shrinking state support.
Even as negotiations continue, ambiguity clouds the framework’s final shape. The government insists details will be shared once finalised. Critics counter that key commitments have already been signalled publicly.
Trade policy, once confined to technocratic circles, is now at the centre of political contestation. The Feb. 12 protests underscored the enduring power of farmers’ mobilisation. The Opposition senses fertile ground. And the government, buoyed by diplomatic optics abroad, must manage mounting turbulence at home.
The framework may yet evolve into a comprehensive agreementor be reshaped under political pressure. But one thing is certain: across India’s fields and factory floors, the debate over who gains and who pays has only begun.