A new debate has started regarding the proposed $500 billion trade and purchase agreement between India and America. US Secretary of State Marco Rubio has claimed that India will buy goods from America on a large scale in the energy, technology and agriculture sectors in the next five years. Rubio is on India tour these days. Posting on social media platform X, he said that India has committed to buy goods worth 500 billion dollars from America. According to him, this purchase will focus on energy, technology and agriculture sectors.
In the ET report, Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), says that the trade structure on the basis of which this deal was prepared is now almost finished. According to him, the India-US bilateral trade agreement was based on a specific tariff system, but now the same system has changed.
In fact, in the talks between the two countries in February 2026, America had indicated to reduce the proposed reciprocal tariff on Indian exports from 25% to 18%. In return, India had talked about large-scale purchases from America, but on February 20, 2026, the US Supreme Court rejected the legal basis of reciprocal tariffs. After this the whole equation changed. The Trump administration moved to impose a flat 10% tariff on all imports under Section 122 of the US Trade Act 1974. This means that now no one country will get any special relief or benefit.
Trade will be affected due to lack of clarity on tariff
GTRI says that when the same tariff will be applicable on all countries, then the special benefit that India gets from this deal also ends. In such a situation, the question arises that if there is no distinct benefit left, then why would India be ready for such a big purchase agreement. The example of Malaysia is also given in the report. In March 2026, Malaysia also ended its trade arrangement with America. Malaysia had said that after the new tariff regime, the old agreement has become null and void.
GTRI has also expressed concern about the economic situation of India. According to the report, the rupee has weakened by about 12% in the last one year. Reasons behind this like rising import cost, expensive crude oil and foreign capital withdrawal have been cited. In such a situation, if India buys energy, defense equipment, aircraft and agricultural products from America on a large scale, it may increase the pressure on trade deficit and foreign exchange reserves. Experts believe that this situation may pose some challenge to the Indian economy.
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