India Should Trade a Lower Tariff for Terms Washington Cannot Easily Undo

A Lower Tariff Today Is Worth Less Than a Promise That Lasts

India should stop measuring a trade deal with the United States by its headline tariff and start measuring it by how long its terms can be relied on. A low rate that Washington can change by itself is worth less than a modest rate India can count on.

Why the

headline rate misleads In eight months, the legal basis for American tariffs on India changed three times. First came country-by-country "reciprocal" tariffs under an emergency law, which the US Supreme Court struck down.

Then came a temporary global tariff. In July, that was replaced by tariffs based on how well countries keep out goods made with forced labour, under which India now pays 10%. The February framework had aimed to bring the US tariff on Indian goods down from 50% to 18%.

Within two weeks, the law behind that 18% was gone. A rate that can disappear that fast is not a stable commitment. Three features make a tariff advantage fragile:

• It is relative. India's 10% matters only compared with rivals. Vietnam pays only slightly more, several countries pay the same and Vietnam's own deal is reportedly close. One signature in Hanoi could erase India's margin.
• The baseline keeps moving. A separate US investigation into "structural excess capacity" covers 16 economies, including India, with a deadline of March 2027. Generic medicines are exempt from new pharma duties only until a review by April 2027.
• The concessions are unequal in duration. India's tariff cuts, farm openings and purchase commitments would be long-term and politically hard to undo. The US rate is an administrative decision Washington can revise on its own.

The best argument against this The strongest objection is that the United States will not bind itself and that pushing for durable terms could cost India the deal altogether, leaving it behind rivals that sign quickly. That risk is real. But it assumes the alternative is a good deal. A deal in which India gives permanent concessions for a revocable rate is not obviously better than no deal. It could be worse, because India would have spent its bargaining chips while Washington kept full discretion. India also obtained its current 10% rate without a deal, by acting on forced-labour imports.

What

India should ask for - A ceiling: no increase in US duties on Indian goods above the agreed level for the life of the deal.

• Non-discrimination: no less favourable treatment than competitors.
• Prior notice and consultation before any new tariff affecting India.
• Sector carve-outs, starting with pharmaceuticals.
• Phased Indian cuts and purchases, tied to US compliance, so India's obligations adjust if Washington raises rates or withdraws exemptions. These asks are not radical. They echo the logic of WTO tariff bindings, which exist precisely because a rate that can be changed at will offers little security.

For the exam, the insight is this: in trade negotiations with a partner whose policy is volatile, predictability is the real prize and concessions should be structured so that they stay matched to the other side's.