NEW DELHI: The recently announced India–US trade agreement may ease pressure on Indian exports, but significant uncertainties persist, according to an analysis by Moody’s Analytics, the research arm of Moody’s.
In a report authored by Aditi Raman, associate economist, and Denise Cheok, economist at Moody’s Analytics, the firm said that while the deal offers some relief, “there are plenty of unknowns” and several aspects remain unclear.
One key area of ambiguity relates to India’s oil imports. The report noted that the agreement appears to assume India will end its purchases of Russian crude oil. However, there has been no formal confirmation from New Delhi on such a commitment.
According to US officials cited in the analysis, India has agreed to gradually phase out imports of Russian crude and substitute them with supplies from the US and Venezuela. Indian authorities, however, have not publicly endorsed that position. The report added that although there is no official confirmation, major Indian refiners have trimmed their intake of Russian oil in recent months. Data show that India’s crude imports from Russia declined 27% year-on-year in September and 34% in October.
The trade pact also includes tariff reductions. Under the agreement, the US will lower its base tariff rate on Indian goods to 18% from 50%. Factoring in key exemptions, this effectively reduces the tariff burden from an estimated 25% to roughly 15%, the report said.
Despite these gains, Moody’s Analytics cautioned that a shift away from Russian energy could prove costly. India currently sources more than 30% of its crude oil imports from Russia, making any rapid pivot to alternative suppliers potentially expensive and logistically challenging.
While the agreement marks a step forward in bilateral economic ties, the report concludes that its full implications—particularly on energy trade and implementation details—remain uncertain.
