Spurred on by China’s export prowess and President Trump’s tariff-centered trade agenda, the European Union and India announced in late January that they had concluded negotiations on a comprehensive free trade agreement. Less than a week later, President Trump revealed the United States had also reached a trade deal—later described as a “framework for an Interim Agreement”—with the world’s fourth-largest economy.
The near-simultaneous announcements invite an obvious question: who got the better deal—the American self-styled “Dealmaker-in-Chief” or Brussels’ much-maligned Eurocrats? Although neither agreement’s full text has been published, the available details strongly suggest that the EU emerged with a more liberalizing, durable, and economically sound agreement. By contrast, the US-India arrangement appears narrower in scope, less certain in effect, and more deeply rooted in a mercantilist mindset that treats imports as a problem rather than a benefit.
To understand why, consider several key dimensions of the two deals.
Tariff Liberalization
The EU-India agreement features extensive tariff liberalization on both sides. The EU will eliminate tariffs on more than 90 percent of tariff lines, covering 91 percent of trade by value. India, in turn, will eliminate tariffs on 86 percent of tariff lines, accounting for 93 percent of trade by value. Partial liberalization of additional lines, such as India’s reported reduction of its 110 percent tariff on automobile imports to 10 percent for up to 250,000 EU vehicles (the limited liberalization of auto imports is a reminder that protectionism is rarely completely eliminated even under free trade agreements), brings total trade coverage to 96.6 percent for India and 99.3 percent for the EU.
The US-India arrangement looks very different. The United States is set to impose an 18 percent “reciprocal tariff” (an egregious misnomer) on imports from India. Certain goods will be exempt from the tariff, including generic pharmaceuticals, gems and diamonds, and aircraft parts. In addition, India will receive relief from various US tariffs, ostensibly imposed on national security grounds, on aircraft and aircraft parts, aluminum, steel, auto parts, and looming tariffs on pharmaceuticals and pharmaceutical ingredients.
While such reductions from currently elevated tariff levels are welcome, tariffs will overall remain far above the roughly 3.3 percent average tariff the United States applied to Indian imports as recently as 2024. These are a direct tax on American consumers and a cost increase for US manufacturers that rely on Indian inputs.
A US-India joint statement hinted at possible further reductions should further negotiations produce a bilateral trade agreement. However, the Trump administration only promised to “take into consideration” India’s request for lower tariffs on its exports—hardly an ironclad commitment to further reductions.
India, for its part, will “eliminate or reduce” (emphasis added) tariffs on all US industrial goods and a “wide range” of US food and agricultural products. US Trade Representative Jamieson Greer, meanwhile, has claimed that tariffs on US industrial goods—currently averaging about 13.5 percent—will be eliminated on “virtually everything,” defined as 98–99 percent of goods, with a “vast array” of agricultural products also becoming tariff-free.
Unfortunately, neither the US-India joint statement nor Greer’s statements can be evaluated without a published agreement, and caution here is warranted.
Scope Beyond Tariffs
Beyond tariffs, the EU-India agreement appears to be a modern free trade agreement in both ambition and design. It reportedly includes chapters on customs and trade facilitation, technical barriers to trade, and regulatory cooperation—areas that increasingly determine whether trade flows smoothly in practice rather than merely on paper. In addition, it includes a chapter designed to open the services sector, as well as one devoted to resolving disputes that may arise under the agreement.
The US-India deal, by contrast, appears more limited. USTR Greer has referenced agreements on a “variety of technical barriers to trade” and a “process for recognizing US standards,” but has offered few specifics. The US-India joint statement, meanwhile, states that the two countries “intend to discuss their respective standards and conformity assessment procedures for mutually agreed sectors.”
In addition, India has promised to “eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions” on US information and communication technology goods and to “address” non-tariff barriers faced by US medical devices and by both food and agricultural exports. Without clear, enforceable commitments, it is difficult to assess whether these provisions will meaningfully reduce trade frictions or amount to little more than aspirational language.
In short, the EU negotiated a broad, institutionalized framework for market integration. The United States appears to have secured a set of partial concessions whose real-world impact remains uncertain.
Durability and Legal Certainty
Perhaps the starkest difference between the two arrangements lies in their legal durability. The EU-India agreement is a binding international treaty that must receive the European Parliament’s consent and approval from India’s Union Cabinet. While no trade agreement is immune from political change, the EU–India pact embeds commitments in a legal and institutional framework that is far more difficult to unwind than the US deal. That will provide businesses with the long-term policy certainty essential for investment, supply chain planning, and cross-border integration.
The US-India deal lacks that permanence. It is not subject to congressional approval and will not be enacted into statute. As an executive arrangement, it can be revised, suspended, or abandoned at the discretion of the White House, either by President Trump or any successor. For firms deciding where to source inputs or locate production, that fragility matters.
Businesses value predictability, and on that score, the EU-India agreement is plainly superior.
Side agreements and managed trade
The contrast extends to what accompanied each deal. On the same day the trade agreement was announced, the EU and India also concluded a mobility agreement easing Indians’ ability to study and work in Europe. That benefits Indian workers and students, but it also benefits the EU by expanding access to human capital and strengthening ties between European universities, firms, and Indian talent.
On the US side, the headline add-on is India’s commitment to purchase $500 billion worth of US energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next 5 years. For context, US goods exports to India in 2024 totaled just over $41 billion. Such purchase commitments are non-binding, difficult to enforce, and eerily reminiscent of the US-China “Phase One” deal, which failed to deliver promised export gains. They reflect a preference for managed trade over liberalization, substituting political targets for market mechanisms and consumer choice. Furthermore, one of the best ways to bolster exports is to increase imports, but high US tariffs make that more difficult.
President Trump has also claimed that India will cease importing Russian oil as part of the deal. If accurate, that would represent a geopolitical win for the United States. Time will tell.
The verdict
Based on what is currently known, it is difficult to avoid the conclusion that the EU secured a better, more economically coherent deal (albeit one that, unfortunately, still leaves a number of trade barriers in place). European negotiators obtained extensive market-opening commitments from India while also liberalizing access to Indian goods. The agreement is broad in scope, legally binding, and built around the premise that trade creates value on both sides of the border.
The United States, by contrast, appears to have accepted a less durable arrangement that prioritizes export gains—many of them uncertain—while maintaining significant barriers against Indian imports. There is little the American side seems to have obtained in terms of durable market access that Europe did not, and a great deal that Europe will enjoy that Americans will not.
Unfortunately, the White House almost surely doesn’t see the outcome this way. The administration remains fixated on exports and trade balances rather than consumer welfare and overall prosperity. That Americans will continue to pay an estimated 18 percent tariff on Indian imports is treated as a feature rather than a flaw, justified by the fact that Americans buy more from India than Indians purchase from the United States.
But trade deficits are not a sign of economic weakness, and the purpose of trade is not to maximize exports. It is to raise living standards by allowing people to acquire goods and services as inexpensively and efficiently as possible. Trade barriers frustrate that goal, while trade liberalization advances it.
So long as President Trump and his advisers refuse to acknowledge this reality, the United States will continue to settle for subpar trade deals while others reap the gains of genuine liberalization.