Op-ed: In a trade deal with the US, India should value terms that are hard to reverse
India's concessions would be permanent; America's tariff rate can change overnight. What should India ask for instead?
Published 5 October 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work
An op-ed in The Indian Express on 5 October 2026, "In trade deal with US, India needs to secure terms harder to reverse", by Soumya Bhowmik of the Observer Research Foundation, argues that India should judge a trade deal with the United States by how durable its terms are, not by how low a tariff rate it wins. The writer says the talks have stalled again, and points to an asymmetry. What India offers, such as cuts in industrial tariffs, opening of farm markets and purchase commitments, is hard to undo once given. What India receives is mainly a US tariff rate that Washington can revise at will. The op-ed therefore asks India to seek binding protections in the text.
The background shows why durability matters. In February 2025 the two countries set "Mission 500", a goal of more than doubling bilateral trade to $500 billion by 2030, and planned the first tranche of a Bilateral Trade Agreement by autumn 2025. In August 2025 US duties on many Indian goods rose towards 50%, half of it an extra 25% penalty linked to India's purchases of Russian oil. On 6 February 2026 the two sides announced a framework for an interim agreement: an 18% US reciprocal tariff on Indian goods, Indian tariff cuts on US industrial goods and some farm products, and an Indian intention to buy $500 billion of US energy, aircraft and technology over five years. The 25% Russian oil penalty was removed from 7 February 2026. On 20 February 2026 the US Supreme Court ruled 6 to 3 in Learning Resources v. Trump that the International Emergency Economic Powers Act (IEEPA) does not allow the President to impose tariffs, striking down the reciprocal tariffs.
The ruling did not end tariff uncertainty, because the US President can still act under other laws: Section 232 of the Trade Expansion Act, 1962 (national security), Section 301 of the Trade Act, 1974 (unfair trade practices) and Section 122 of the same Act (a temporary surcharge for balance-of-payments problems, for up to 150 days). The op-ed proposes that India seek a binding ceiling on US duties for the life of the deal, a most-favoured-nation-type promise that India will not be treated worse than competitors, prior notice and consultation before new tariffs, sector carve-outs written into the text starting with pharmaceuticals, and phased Indian concessions that can be suspended if the US breaks its side. The writer accepts that holding out for stronger terms carries a risk: competitors such as Vietnam that sign first may attract supply-chain investment.
Prelims facts
- Mission 500 (February 2025) aims to take India-US bilateral trade to $500 billion by 2030.
- The India-US framework for an interim agreement (6 February 2026) set an 18% US reciprocal tariff on Indian goods; the extra 25% Russian oil penalty was removed from 7 February 2026.
- In Learning Resources v. Trump (20 February 2026, 6 to 3), the US Supreme Court held that IEEPA does not authorise the President to impose tariffs.
- US tariffs can still be imposed under Section 232 (national security), Section 301 (unfair trade practices) and Section 122 (balance of payments, up to 150 days).
- The op-ed urges India to seek a binding tariff ceiling, non-discrimination, prior consultation, written sector carve-outs and snap-back clauses.
Quick recall
- What is Mission 500?
- The India-US goal, set in February 2025, of $500 billion in bilateral trade by 2030.
- US reciprocal tariff on Indian goods under the February 2026 interim framework?
- 18%.
- When was the extra 25% US duty linked to Russian oil removed?
- From 7 February 2026.
- Name of the February 2026 US Supreme Court tariff case, and the vote.
- Learning Resources v. Trump; 6 to 3.
- What did the US Supreme Court hold in February 2026?
- IEEPA does not give the President power to impose tariffs.
- Which US law allows tariffs on national security grounds?
- Section 232 of the Trade Expansion Act, 1962.
- Maximum duration of a Section 122 surcharge without Congress?
- 150 days.
- Who wrote the Indian Express op-ed on durable trade terms?
- Soumya Bhowmik, Observer Research Foundation.
Prelims practice question
With reference to United States trade law, consider the following statements:
1. Section 232 of the Trade Expansion Act, 1962 allows tariffs on grounds of national security.
2. Section 122 of the Trade Act, 1974 allows a temporary import surcharge to address balance-of-payments problems.
3. In February 2026, the US Supreme Court upheld the use of the International Emergency Economic Powers Act to impose reciprocal tariffs.
Which of the statements given above are correct?
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
Show answer
Answer: (a) 1 and 2 only. Statements 1 and 2 are correct. Statement 3 is wrong: in Learning Resources v. Trump (20 February 2026) the Court held, 6 to 3, that IEEPA does not authorise tariffs, and struck the reciprocal tariffs down.
Use this in UPSC Mains: previous-year questions
Recurring theme: India's trade policy amid US protectionism and the weakening of multilateral trade rules
- How to use this
Use India-US tariff swings to illustrate the challenges of protectionism and the op-ed's proposals as ways to meet them.
- US duties on many Indian goods rose towards 50% in August 2025, then fell to an 18% reciprocal rate under the February 2026 interim framework.
- The US Supreme Court struck down IEEPA tariffs in February 2026, but Sections 232, 301 and 122 still allow new duties.
- India can seek a binding tariff ceiling, non-discrimination, prior consultation and snap-back clauses in bilateral deals.
- How to use this
Open by showing that, with WTO disciplines weakened, India now has to negotiate bound ceilings and MFN-type promises bilaterally.
- India can seek a binding ceiling on US duties and an MFN-type promise of non-discrimination, recreating WTO-style bound commitments inside a bilateral deal.
- The 2025 to 2026 US tariff swings on India came through executive action, not negotiated rule changes.
US tariff actions are a form of protectionism that affects Indian exports, but the question also covers currency manipulation, which this op-ed does not address.
Mains practice question
"In trade negotiations with a partner that can change tariffs at will, durable terms matter more than a low tariff rate." Discuss with reference to India's trade negotiations with the United States. (250 words)
Model answer
India and the US have negotiated a trade deal since setting "Mission 500" in February 2025, the goal of $500 billion in bilateral trade by 2030. A recent op-ed argues that India should prize durable terms over a low headline tariff.
Why durability matters
- Asymmetry: India's industrial tariff cuts, farm openings and purchase commitments are hard to reverse; a US tariff rate can be changed by executive action.
- Track record: US duties on many Indian goods rose towards 50% in August 2025, then fell to an 18% reciprocal rate under the February 2026 interim framework.
- Legal churn: the US Supreme Court struck down IEEPA tariffs in February 2026, yet Sections 232, 301 and 122 still allow new duties.
What durable terms could look like
- A binding ceiling on US duties for the life of the deal.
- A most-favoured-nation-type assurance against worse treatment than competitors.
- Prior notice and consultation before new tariffs.
- Sector carve-outs in the text, starting with pharmaceuticals.
- Phased Indian concessions with snap-back if the US does not comply.
Counter-arguments
- Washington may refuse limits on executive tariff powers.
- Delay risks losing supply-chain investment to rivals who sign first.
- Farm concessions carry domestic political costs.
Way forward
- Sequence concessions to match US commitments.
- Keep WTO-style bound commitments as the reference point.
- Diversify through other agreements, such as those with the EU and UK.
A modest tariff that lasts serves exporters better than a low one that can vanish overnight.
The basics
Why this matters
The United States is one of India's largest export markets, and since 2025 its tariffs on Indian goods have moved sharply up and down. India has been negotiating a trade deal to bring certainty. This op-ed asks a basic question of negotiation: what is the most valuable thing India can get from such a deal?
A year and a half of tariff swings
- February 2025Mission 500: goal of $500 billion bilateral trade by 2030; trade deal talks begin
- August 2025US duties on many Indian goods rise towards 50%, including a 25% Russian oil penalty
- 6 February 2026Framework for an interim agreement: 18% US reciprocal tariff
- 7 February 202625% Russian oil penalty removed
- 20 February 2026US Supreme Court rules IEEPA does not authorise tariffs
- 5 October 2026Op-ed: talks stalled; India should seek durable terms
Each swing was the result of US executive action, not a change in any treaty. That is the op-ed's main point.
Two kinds of promises
- Cuts in tariffs on US industrial goods
- Opening for some US farm products
- Purchase intentions for energy, aircraft, technology
- Hard to reverse once given
- A US tariff rate on Indian goods
- Set by executive order
- Can be revised quickly
- Not bound by a ceiling unless written in
Economists call this a commitment problem. A promise is worth only as much as the cost of breaking it.
The legal toolkit in Washington
The US Supreme Court's ruling in IEEPA and the Learning Resources ruling removed one tariff tool. Others remain, as explained in US trade laws: Sections 232, 301 and 122.
- 1IEEPA, 1977Struck down as a basis for tariffs by the Supreme Court
- 2Section 232, 1962Tariffs on imports that threaten national security
- 3Section 301, 1974Action against unfair foreign trade practices
- 4Section 122, 1974Temporary surcharge for balance-of-payments problems, up to 150 days
What durable terms mean
At the WTO, countries bind their tariffs: they promise not to raise them above a ceiling and not to discriminate between members. WTO bound tariffs and the MFN rule explains this. The op-ed asks India to recreate such protections inside the bilateral deal, building on the India-US interim trade framework, 2026: a binding ceiling, a non-discrimination promise, prior consultation, written carve-outs for sectors like pharmaceuticals, and snap-back clauses.
Go deeper
In one line: An Indian Express op-ed argues that India's concessions in a US trade deal are permanent while US tariffs can change at will, so India should seek binding, durable protections rather than only a low tariff rate.
Why it matters for UPSC
India-US trade is a recurring GS2 and GS3 theme: protectionism, bilateralism versus multilateralism, and the WTO's weakness. The story also gives recent, citable facts: the February 2026 interim framework and the US Supreme Court's IEEPA ruling.
The core idea
Since 2025 US tariffs on Indian goods have swung from towards 50% down to 18%, each time by executive action. The India-US interim trade framework, 2026 set the 18% rate. The US Supreme Court's IEEPA and the Learning Resources ruling removed one tariff power, but US trade laws: Sections 232, 301 and 122 remain. The op-ed asks India to write into the deal the kind of protections that WTO bound tariffs and the MFN rule give at the multilateral level.
Numbers and dates to remember
- February 2025: Mission 500, $500 billion trade by 2030.
- August 2025: US duties towards 50%, including a 25% Russian oil penalty.
- 6 February 2026: interim framework, 18% US reciprocal tariff.
- 7 February 2026: 25% Russian oil penalty removed.
- 20 February 2026: Learning Resources v. Trump, 6 to 3.
- 150 days: limit of a Section 122 surcharge.
Where to go next
- IEEPA and the Learning Resources ruling: why the US Supreme Court struck down emergency tariffs.
- US trade laws: Sections 232, 301 and 122: the tariff powers the US President still has.
- WTO bound tariffs and the MFN rule: what binding and non-discrimination mean.
- India-US interim trade framework, 2026: what India and the US agreed in February 2026.
Go deeper: a low rate or a lasting one?
The op-ed's argument. A trade deal is an exchange of promises. India's promises, such as tariff cuts on US industrial goods and openings for some farm products under the India-US interim trade framework, 2026, change domestic markets and are politically costly to withdraw. The US side mostly offers a tariff rate set by executive action. After the IEEPA and the Learning Resources ruling, the President still holds the US trade laws: Sections 232, 301 and 122, so a rate agreed today can be overtaken tomorrow. The writer's answer is to write limits into the text: a tariff ceiling, non-discrimination, prior consultation, sector carve-outs and snap-back clauses.
The other side. Sceptics note that US negotiators value executive flexibility and may reject binding ceilings. If India holds out, rival exporters may sign first and attract investment that is looking to diversify supply chains. A low rate now, even if reversible, gives exporters immediate relief. Farm concessions are sensitive in India whatever the durability of US promises.
The multilateral lesson. Durability is what the WTO was built to provide. Members bind tariffs and accept the MFN rule, as WTO bound tariffs and the MFN rule explains, and disputes go to adjudication. With the WTO's dispute system weakened, bilateral deals must carry their own enforcement, which is why snap-back and phased concessions matter.
For answers. Use this as an example of the shift from rules-based multilateralism to transactional bilateralism, and of how India can protect itself: sequence concessions, diversify partners, and insist on enforceable text.
IEEPA and the Learning Resources ruling
The US Supreme Court case that struck down emergency tariffs in February 2026.
In one line: In Learning Resources v. Trump (20 February 2026), the US Supreme Court held 6 to 3 that the International Emergency Economic Powers Act does not give the President power to impose tariffs.
What IEEPA is
IEEPA is a 1977 US law that lets the President regulate economic transactions after declaring a national emergency arising from an unusual and extraordinary foreign threat. It has long been used for sanctions, such as freezing assets. In 2025 it was used as the legal basis for broad tariffs, including the April 2025 reciprocal tariffs and tariffs on Canada, Mexico and China linked to fentanyl.
What the Court decided
The Court ruled that IEEPA's broadly worded emergency powers do not include the power to impose tariffs. The reciprocal tariffs and the 10% global baseline tariff were struck down. Tariffs under other laws, such as those on steel and aluminium, were not affected.
Why it matters for India
The ruling removed one route for sudden tariffs but left others in place, so uncertainty for Indian exporters remains.
Where to go next
US trade laws: Sections 232, 301 and 122
The tariff powers the US President still holds after the IEEPA ruling.
In one line: Three US statutes that still allow tariffs: Section 232 for national security, Section 301 for unfair trade practices, and Section 122 for balance-of-payments emergencies.
Section 232, Trade Expansion Act, 1962
After an investigation by the Commerce Department, the President may adjust imports that threaten to impair national security. It has been used for tariffs on steel and aluminium, among others.
Section 301, Trade Act, 1974
The US Trade Representative investigates foreign practices that are unreasonable, discriminatory or that burden US commerce, and can recommend tariffs or other action. It was the basis of US tariffs on China from 2018.
Section 122, Trade Act, 1974
Allows a temporary import surcharge to deal with large and serious balance-of-payments deficits, capped at 15% and for up to 150 days unless Congress extends it.
Why they matter now
Because these powers survive the Supreme Court's IEEPA ruling, any US tariff rate agreed with India can be changed, which is why the op-ed seeks binding terms.
Where to go next
WTO bound tariffs and the MFN rule
The multilateral model of durable trade commitments the op-ed wants to copy.
In one line: At the WTO, members bind their tariffs at agreed ceilings and must treat all members equally, which makes their promises durable and predictable.
Bound tariffs
Under GATT Article II, each WTO member lists in its schedule the maximum tariff it will charge on each product. This is the bound rate. A member can charge less (the applied rate) but cannot exceed the bound rate without renegotiating and compensating partners.
Most-favoured-nation (MFN)
GATT Article I requires that any advantage given to one member's goods be given to all members. Exceptions include free trade areas and customs unions under GATT Article XXIV, and a general security exception under Article XXI.
Why it matters now
Bilateral deals that set only an applied rate lack this durability. The op-ed asks India to secure a ceiling, MFN-type non-discrimination and consultation in its US deal, mirroring these WTO disciplines.
Where to go next
India-US interim trade framework, 2026
What India and the US actually agreed in February 2026.
In one line: A framework announced on 6 February 2026 for an interim India-US trade agreement, setting an 18% US reciprocal tariff on Indian goods in return for Indian tariff cuts and purchase intentions.
Background
In February 2025 the two countries set Mission 500, aiming to more than double bilateral trade to $500 billion by 2030, and agreed to negotiate the first tranche of a Bilateral Trade Agreement. In August 2025 US duties on many Indian goods rose towards 50%, including an extra 25% linked to India's Russian oil imports.
What the framework contains
- An 18% US reciprocal tariff on Indian goods such as textiles, leather, plastics and machinery.
- Indian reduction or removal of tariffs on US industrial goods and some farm products, such as tree nuts, wine and spirits.
- An Indian intention to buy $500 billion of US energy, aircraft, technology and other goods over five years.
- Work on non-tariff barriers and digital trade.
The 25% Russian oil penalty was removed from 7 February 2026.
Where to go next
Prelims-style quiz
Consider the following statements about the India-US framework for an interim trade agreement announced in February 2026:
1. It set a US reciprocal tariff of 18% on Indian goods.
2. India stated an intention to purchase $500 billion of US energy, aircraft, technology and other products over five years.
3. It made India a party to a binding ceiling on all future US tariffs.
How many of the statements given above are correct?- Only one
- Only two
- All three
- None
Show answer
Answer: (b) Only two. Statements 1 and 2 are correct as per the framework. Statement 3 is wrong: there is no binding ceiling on US tariffs; that is precisely what the op-ed says India should seek.
Consider the following US laws:
1. Section 232 of the Trade Expansion Act, 1962
2. Section 301 of the Trade Act, 1974
3. Section 122 of the Trade Act, 1974
4. International Emergency Economic Powers Act, 1977
How many of the above remain available to the US President as a basis for imposing tariffs after the US Supreme Court's ruling of 20 February 2026?- Only one
- Only two
- Only three
- All four
Show answer
Answer: (c) Only three. Sections 232, 301 and 122 remain available. The Court held that IEEPA does not authorise tariffs, so it is no longer a valid basis.
Consider the following statements:
Statement-I: The US Supreme Court's ruling against IEEPA tariffs did not end uncertainty about US tariffs on Indian goods.
Statement-II: The US President can still impose tariffs under other statutes such as Section 232 and Section 301.
Which one of the following is correct in respect of the above statements?- Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
- Both Statement-I and Statement-II are correct and Statement-II does not explain Statement-I
- Statement-I is correct but Statement-II is incorrect
- Statement-I is incorrect but Statement-II is correct
Show answer
Answer: (a) Both Statement-I and Statement-II are correct and Statement-II explains Statement-I. Both are true, and the continuing availability of other tariff laws is why uncertainty persists. Statement-II explains Statement-I.
Consider the following statements:
1. Under WTO rules, a 'bound' tariff is a ceiling that a member commits not to exceed.
2. The most-favoured-nation principle requires a WTO member to give all members treatment no less favourable than it gives any member, subject to exceptions such as free trade agreements.
Which of the statements given above is/are correct?- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Show answer
Answer: (c) Both 1 and 2. Both are correct. Bound rates are listed in each member's schedule under GATT Article II, and MFN is in GATT Article I, with Article XXIV allowing free trade areas and customs unions as an exception.
The International Emergency Economic Powers Act (IEEPA), recently in the news, is a law of which country?
- United Kingdom
- United States
- Canada
- Australia
Show answer
Answer: (b) United States. IEEPA is a 1977 US law giving the President powers in national emergencies. The US Supreme Court held in February 2026 that it does not allow tariffs.