New Delhi [India]: Following US President Donald Trump’s announcement of a 90-day pause on new tariffs for trade negotiations, the Global Trade Research Initiative (GTRI) has advised India to avoid signing a comprehensive Free Trade Agreement (FTA) with the United States, citing potentially harmful trade-offs for key Indian sectors.
In a recent policy report, GTRI strongly recommended that India pursue a limited “Zero-to-Zero” tariff agreement on 90% of industrial goods, similar to a model previously offered by Europe to the US.
“Avoid a comprehensive FTA with the US as it would force India to make damaging concessions. It’s a deal that would cost India more than it gains. Restrict to Zero for zero deal on 90 per cent industrial goods,” GTRI stated.
The report warned that a full-spectrum FTA with the US would come with demands that could undermine critical Indian policies, including:
- Weakening the Minimum Support Price (MSP) system for farmers
- Allowing genetically modified (GM) food imports
- Reducing tariffs on agricultural products
- Amending patent laws to extend pharmaceutical monopolies
- Permitting direct consumer sales by US e-commerce giants
GTRI said such shifts would negatively affect farmer incomes, food security, public health, and small-scale retail, while also exposing the auto sector—a major contributor to India’s manufacturing—to external competition.
The report cited the collapse of Australia’s auto industry in the 1990s after it reduced import tariffs as a cautionary tale for India.
It also took aim at India’s past practice of offering unilateral concessions to the US, referencing President Trump’s crude dismissal of such efforts as “kissing my a*.”*
Instead, GTRI recommends India:
- Prioritize FTAs with the EU, UK, and Canada
- Enhance partnerships with China, Russia, Japan, South Korea, and ASEAN
- Build joint value chains with China in machinery, chemicals, and electronics to boost local value and export competitiveness
“This approach deserves serious attention from both industry and policymakers,” the report emphasized.