Indo-US trade deal optimism must be tempered with realism

With US President Donald Trump himself saying that there will be a trade agreement with India, it is reasonable to hope for a deal soon. “We will get to a deal because I like your Prime Minister [Narendra Modi] a lot. He is a good friend of mine. We get along great, and we are gonna make a deal,” he told reporters on Thursday. This statement comes soon after US Ambassador Sergio Gor suggested that the bilateral pact was 99 per cent complete. Both sides are trying to resolve the remaining “one per cent” sticking points, he said, adding that he expected the long-awaited pact to be inked within the next several weeks. Speaking at an event in Mumbai, Gor, who is also the President’s Special Envoy to South and Central Asia, also said, “Your Prime Minister normally never criticises the President. He [PM Modi] has stayed in touch during those four years when the Trump was out [of office].

And that’s something that the President remembers.” In other words, the personal equation between global dignitaries does matter. It is important to note that the Indian position on the progress in the bilateral agreement is the same. Days before Gor’s remarks, Commerce & Industry Minister Piyush Goyal also said that the two nations are in the final stages of concluding the first tranche of a long-awaited agreement. He also said that 99 per cent of negotiations have been completed.

So, overall, the situation seems promising, but our optimism must be tempered by realism, given Trump’s behaviour since Operation Sindoor. New Delhi will not be accused of being delusional if it suspects Washington’s tilt towards Islamabad.

At any rate, Pakistan’s role in brokering peace with Iran gives the former the opportunity to leverage its newfound importance to damage Indian interests economically. India cannot afford to view the relationship through an exclusively economic lens.

Trump’s repeated references to Pakistan’s role in regional diplomacy, especially in relation to developments in West Asia, have raised concerns in New Delhi about whether Islamabad is once again acquiring strategic relevance in Washington’s calculations. Such perceptions matter because geopolitical considerations frequently influence economic negotiations, regardless of the public assurances offered by policymakers. Pakistan’s growing diplomatic visibility may provide it with opportunities to regain influence in key international capitals. If Islamabad succeeds in portraying itself as an indispensable partner in regional stability, it could seek to leverage that status in ways that undermine Indian interests.

This may not necessarily take the form of overt opposition to India, but rather subtle lobbying on trade, investment, market access, or strategic partnerships where New Delhi and Islamabad have competing interests. Indian experience has been that trade agreements are rarely, if ever, insulated from broader geopolitical realities. The final one per cent of negotiations often comprises the most politically sensitive issues, ranging from market access and tariff structures to regulatory standards and strategic sectors. And even when technical discussions appear largely complete, external developments can influence the pace and substance of final decisions. We must strive

towards a successful trade agreement, as it would indubitably strengthen bilateral economic relations and create new opportunities for growth. At the same time, our approach must continue to balance economic ambition with strategic prudence. Diplomatic goodwill is valuable, but national interests ultimately require constant vigilance and timely action.