India-US trade deal: Why a ‘modify commitments’ clause in framework agreement offers New Delhi wriggle room

Indian trade negotiators, headed to Washington, DC, for three-day talks starting Monday to finalise the legal text of the India-US trade agreement struck earlier this month, had to literally abort their trip as New Delhi pushed for rescheduling these discussions. The US has signed framework agreements with nearly 20 trade partners, and US Trade Representative Jamieson Greer was at pains to assert that all these 20-odd trade deals stand as negotiated. But for India, there is sufficient wriggle room: One, India’s deal is still very much under negotiation and the two countries have only reached a framework for an Interim Agreement; two, and more importantly, clause 8 in the Framework for an Interim Agreement says: “In the event of any changes to the agreed upon tariffs of either country, the United States and India agree that the other country may modify its commitments.” This clause, an insertion from the Indian side given the multiple legal challenges to Trump’s tariffs, could now provide some space for India to recalibrate the tariff and non-tariff concessions from its side, while keeping the American side engaged on thrashing out a meaningfully balanced trade deal. Commitment stands ‘modified’ After the US Supreme Court ruled that President Donald Trump overstepped his powers by imposing sweeping tariffs under the International Emergency Economic Powers Act (IEEPA), India can potentially invoke that specific clause to say that America’s commitment now stands “modified”. The earlier 18% “concessional” tariff offered by the Trump administration under IEEPA is now replaced with a flat 15% tariff for all of America’s trading partners. The US is currently in an unusually unstable phase of trade policy, said former trade negotiator and founder of Delhi-based trade think-tank GTRI, Ajay Srivastava, adding that India should avoid acting under pressure and proceed with “caution and strategic clarity”. “The US Supreme Court ruling should prompt India to walk out of the ongoing trade deal negotiations with the United States. The US–India Joint Statement of February 6, 2026, states that ‘in the event of any changes to the agreed upon tariffs of either country, the United States and India agree that the other country may modify its commitments.’ With US tariffs now altered, India should invoke this clause to pause negotiations,” Srivastava told The Indian Express. He said the proposed trade deal places tough conditions on India. “In exchange for an 18% reciprocal tariff rate, India was expected to offer major concessions — cutting tariffs, aligning economic policies with US interests, easing regulations affecting US goods, and signalling large purchases of American products. Now, even without a trade agreement, without making any sacrifices, India, like other countries, faces a 15% tariff on most goods, rendering the negotiated arrangement burdensome and one-sided,” he said. The 15% announced Saturday is the maximum allowed under a never-used American trade law (under Section 122 of the 1974 Trade Act). Also, this 15% is temporary, given that the provision only allows the new tariffs to stay in place for around five months (150 days). After that, the American government must seek US Congressional approval. So, the uncertainties persist. India and the US had agreed to a framework, but were yet to officially sign the deal. Negotiators were expected to give legal shape to the agreement this week. The delay in negotiations could mean that New Delhi may not have to immediately give market access to American products, as agreed during negotiations. Trump, however, said Friday that nothing has changed in the India-US deal. Government officials have asserted that market access from the Indian side would only be possible after the legal agreement is wrapped up. The White House’s legal authority to execute these one-sided agreements, none of which have been approved by Congress, is now unclear, given the negotiating plank — the so-called reciprocal tariffs — are now gone entirely. Even the flat 15% that the US administration has now imposed under Section 122 is open to legal challenge, because the administration has to prove balance of payments-related challenges for America as a justification to do so. Also, now for any tariff deal to be inked by a trade partner, this new 15% uniform rate becomes the baseline scenario. So, for any preferential access or concessions offered by trade partners, the tariff for access to the US market has to be lower than this uniform rate. After the 15% now levied under Section 122, and including the exclusions there are for pharma, electronics, and some auto parts, India’s weighted average tariffs into the US has come down from an effective 34% (when tariffs were cumulatively at 50%) now to around 9% (with the 15% Section 122 tariffs), analysts said. ## Eye on China From India’s perspective, it would be important to watch where the Chinese trade deal is headed. A White House official said that US President Donald Trump is set to visit China from March 31 to April 2 this year, with trade talks on the anvil. Any decision on the India talks would be likely with this visit looming in the horizon. India had been facing a cumulative tariff of 50% into the US since August 2025 (reciprocal tariff plus additional tariffs for import of Russian oil), which meant that its effective incidence of duties into the US was marginally higher than China. After the framework for a trade deal was agreed upon by both sides earlier this month, the rate currently being levied on Indian goods is 25%, given that the Russian oil penalty has been removed. This was further slated to come down to 18% — the ‘reciprocal tariff’ decided after the deal was to kick in. Now, this is down to 15%. Meanwhile, China was faced with reciprocal tariffs, as well as the fentanyl tariffs under IEEPA (alongside Mexico and Canada), all cumulatively adding up to 45%. At least for now, with this flat rate of 15%, most major countries are in a better situation than before Friday’s court ruling. India, China, South Korea, Japan, almost all of ASEAN, Kazakhstan, Turkey, South Africa, Libya, Brazil, Mexico and Canada are now at a lower rate, to be implemented from February 24. The thing to see is if Trump rolls out a much lower tariff for China in the upcoming talks. The UK, Australia, Saudi Arabia, the UAE, Qatar, most of north and central Africa, Argentina and Colombia are now at a higher tariff rate, alongside Russia. The EU and the Scandinavian nations are where they were under the earlier differential tariffs slapped under IEEPA, which the top court struck down. Anil Sasi is the National Business Editor at The Indian Express, where he steers the newspaper’s coverage of the Indian economy, corporate affairs, and financial policy. As a senior editor, he plays a pivotal role in shaping the narrative around India's business landscape. Professional Experience Sasi brings extensive experience from some of India’s most respected financial dailies. Prior to his leadership role at The Indian Express, he worked with: The Hindu Business Line Business Standard His career trajectory across these premier publications demonstrates a consistent track record of rigorous financial reporting and editorial oversight. Expertise & Focus With a deep understanding of market dynamics and policy interventions, Sasi writes authoritatively on: Macroeconomics: Analysis of fiscal policy, budgets, and economic trends. Corporate Affairs: In-depth coverage of India's major industries and corporate governance. Business Policy: The intersection of government regulation and private enterprise. Education Anil Sasi is an alumnus of the prestigious Delhi University, providing a strong academic foundation to his journalistic work. Find all stories by Anil Sasi here ... Read More