India Holds the Line: EU Leverage Helps New Delhi Seal Lower US Tariff Deal!

Prime Minister Narendra Modi’s announcement on Monday evening that Indian goods will now face a reduced US tariff of 18% is certainly a major win for New Delhi and from an Indian observer’s standpoint, it also signals something bigger than tariff arithmetic, India is no longer negotiating trade deals as a petitioner, but as a power that can shape outcomes.

As per the news reports, after a phone call with US President Donald Trump, Modi posted on X that he was “delighted” that “Made in India products will now have a reduced tariff of 18%,” and thanked Trump for what he described as a “wonderful announcement.” He also framed it in strategic terms, saying that when “two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”

Interestingly, PM Modi’s post did not explicitly mention a trade deal but Union Minister Ashwini Vaishnaw later confirmed that India and the US had reached an agreement, calling it a “win-win.”

What stands out to me: India didn’t blink

What makes this development significant is not just the 18% tariff rate, but the journey to it. Over the last 12 months, India and the US have been locked in tense negotiations that often appeared to be slipping into open friction. At one stage, India was hit with some of the steepest tariffs in the world, including a 50% tariff on Indian goods and a punitive levy. Yet New Delhi did not rush into a deal out of pressure. It held its line. From an Indian lens, this is a clear indicator that India is increasingly willing to tolerate short-term pain tariffs, diplomatic heat, even headline noise in order to avoid accepting trade terms that would weaken long-term policy autonomy.

The EU factor: India had options and Washington knew it

One major reason India could negotiate with this kind of firmness is that it wasn’t negotiating in isolation. The parallel momentum of the India–EU trade deal changed the entire strategic geometry. As India deepened trade engagement with Europe, it sent a quiet but powerful message, that India has alternatives. That matters because it reduces America’s ability to use tariffs as a pressure tool. If Europe is opening up as a bigger export and investment partner, India’s dependence on the US market becomes less absolute. And once India has credible alternatives, Washington’s leverage naturally weakens.

The EU deal also likely served as a benchmark. New Delhi could not have politically sold a US agreement that appeared worse than what India was extracting from Europe. In that sense, India’s EU progress didn’t just diversify trade, it strengthened India’s negotiating hand with the US.

Trump’s claims vs India’s calibrated messaging

The timeline of announcements was also telling. The first mention came from US ambassador Sergio Gor via social media, followed by PresidentTrump’s lengthy Truth Social post, and only later PM Modi’s own statement. Trump claimed the two sides concluded a trade deal in which India would reduce tariffs and non-tariff barriers against the US to zero, stop buying Russian oil, and buy American goods, including energy worth more than $500 billion. He even linked these commitments to ending the Russia-Ukraine war.

But what struck me was India’s restraint.

Indian Prime Minister post focused narrowly on what India secured reduced tariff rates for Indian goods and broader partnership language. It avoided endorsing the more dramatic claims, especially around Russian oil. This is classic Indian diplomacy: take the win, keep the tone positive, but do not publicly lock yourself into commitments that may not align with domestic priorities. India has consistently maintained that energy sourcing decisions are guided by market conditions and energy security. While Russia became a major supplier after India began buying discounted crude following Western sanctions, those purchases have reportedly been declining in recent months.

The bigger story: India is becoming a rule-setter

For me, the real takeaway is this: India’s trade posture is changing. India is now negotiating simultaneously with major blocs the US and the EU and using that multi-alignment to extract competitive outcomes. This is exactly what mature trading powers do: they diversify partners, avoid dependency, and make others compete for access to their market. The 18% tariff also gives India a competitive edge in the region, being lower than Pakistan’s 19% rate — a detail that will not go unnoticed in trade circles. Modi also praised Trump, calling his leadership “vital for global peace, stability, and prosperity,” and expressed willingness to work closely with him to take the partnership to “unprecedented heights.” But beyond the diplomatic courtesies, Monday’s announcement underlines a harder reality: India is increasingly being treated as a country that cannot be pushed into deals only negotiated with. And that, more than any single tariff number, is what makes this moment politically and economically significant for India.

Author: Boddhisatya Tarafdar is a Banker, History-Enthusiast, student of Economics & International Relations

“Sanskrit is not taught correctly in India”: Dr Bibek Debroy

Boddhisatya Tarafdar had the opportunity to meet eminent Economist & Sanskrit Scholar, Dr Bibek Debroy at his office at Neety Aayog Bhawan, New Delhi. Dr Debroy is presently serving as the Chairman of the Economic Advisory Committee of the Prime Minister of India and has translated a number of ancient Indian Texts (like Mahabharata, Puranas etc.) into English.

His conversation with Boddhisatya Tarafdar can be viewed through the following Youtube link:

The first partition of Bengal happened in 1874 & not in 1905

The caption might sound very weird to many but this is historically correct that the region of Bengal was partitioned by India’s colonial masters much before the infamous Partition of Bengal of 1905. When the the district of Sylhet (or Srihatta) was separated from Bengal in 1874 and made a part of the newly created Assam Chief-Commissionership or simply with Assam along with the Bengali speaking areas of Cachar and Goalpara. The rationale for inclusion of Sylhet with Assam, given by the government, as administrative reasons then having tea industry in both Sylhet and in Assam etc. However, the important point is, both the Assamese people of Assam and the Bengali speaking people of Sylhet were not only dissatisfied with the decision but various protests were organised at that point of time. Moreover, after inclusion of Sylhet, that became the most populated district of Assam, causing grief among the Assamese people who just got separated from the Bengal Province and now had its most populated district dominated by a Bengali speaking population. On the other hand, the people of Sylhet were angry with the British government for separating the district from Bengal and making them a part of Assam. So, the partition of Bengal had started in 1874 and showed its full face in 1905, under the stewardship of Governor General Lord Curzon. Very importantly, when Gurudev Rabindranath Tagore visited Sylhet 1919, he not only gave two lectures at Townhall Yard on November 6th and at MC College on November 7th but also wrote a poem on Sylhet in Bengali. The poem was not a simple literary piece by the poet, it stated about cruel exile of Sylhet from Bengal. Moreover, writer and researcher on the works of Tagore, Professor Nripendra Lal Das said, “Rabindranath never wrote any poem about any place except Sylhet”, the English translation of the poem:

“In the cruel stream of time/ you are exiled/ from the frontiers of Bengal/ O land of beauty/ your heart is bound/ with the heart of Bengal/ with the garland of language/ the blessings of Bengal are knotted/ in that bond forever with you.”

Back to 1874, the remaining Bengal with a population of about 8 crores and 1,89,900 sq. miles area continued to be a subject of discussions among the British administrative circles for being a very large area being administered as a single unit and the related issues. Lord Carzon, after his appointment as the Governor General took up the task of portioning Bengal in 1903. His initial plan was about inclusion of the districts of Dhaka (or Ducca), Chittagong and Mymensingh in Assam, as it happened with Sylhet, Cachar and Goalpara. The plan received extreme criticism from all corners of the society. Not only the vernacular newspapers in the region but the English newspapers like Englishmen (considered as the mouthpiece of the conservative English society) also wrote against the move. There were more than 300 protest meetings held only in Eastern Bengal and both the Hindu and Muslim communities together stood against this. Moreover, the principal organisation of the British traders i.e the Bengal Chamber of Commerce also opposed this plan. It did not take much time for Curzon to realise that the political unity among the Bengalis could take the form of a major threat to the very existence of the British Empire in India. Then, Lord Curzon decided to divide the entire Bengal into two parts, one comprising East Bengal, North Bengal and Assam and the other including West Bengal, Odisha (or Orissa) and Bihar. The plan was not only to split up the nationalist, educated and progressive Bengalis but also to reduce them to a minority in both the provinces and also to strengthen the hands of the Bengali Muslims to have them to support the government’s move. In this process, Lord Curzon lent a huge sum of money to the Nawab of Dhaka at a very low interest, tempted him with an enhanced prestige and made him the principal supporter of the partition, which would make East Bengal a separate administrative unit with a Muslim majority.

The plan was designed to weaken the Bengalis who had become very conscious of nationalism. On January 1905, about 300 representatives from different parts of Bengal met in a special conference headed by Sir Henry Cotton, the retired Chief Commissioner of Assam, who presided over the last Indian National Congress session. Where, Sir Cotton proposed about separating Bihar and Chota Nagpur (today’s Jharkhand area) from Bengal, if required for administrative reasons and also to include Sylhet district and Bengali speaking area of Cachar back to Bengal and the resolution was passed in the conference. The conference also urged the government to make a public disclosure of the matter to evaluate the general public opinion in this regard, before implementing the plan. It is important to note that Sir Cotton was not only the President of the Congress but he was also a supporter of Indian Home Rule and during his stay in Assam, he established the Cotton College, at Guwahati (or Gauhati), the oldest institute of higher education in Assam and all of Northeast India.

In the month of May 1905, a memorial with signatures of 60,000 was prepared and despatched to London so that the matter could be stopped and no such decision of partition is approved by the Brtitish government without consulting the people of Bengal. But by then, Mr. Brodrick, the then Secretary of State for India had already approved the proposal by government of India. The government of India made the matter public on July 7th 1905 from Shimla, finally published the decision as a resolution on July 19th and by this, Bengal got partitioned in to two parts. From here the history of colonial India and her freedom movement took a different turn and eminent historian of Dr. R.C Majumdar wrote that the policy of communal discrimination by Lord Curzon gradually came  to be accepted as a principal and permanent strategy of British policies and was ultimately responsible for the birth of Pakistan.

Lord Curzon (Picture: Wikipedia)

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