What Happened
- Major trade unions and farmers' organisations in India announced plans to intensify protests against the India-US interim trade deal, building on a nationwide strike (Bharat Bandh) held in February 2026 that partially disrupted public services and manufacturing.
- The joint protest platform argued that the deal — which lowers tariffs on US agricultural goods entering India — would expose Indian farmers and small businesses to unfair competition from heavily subsidised American produce.
- A fact sheet from the White House indicated the deal would reduce the reciprocal tariff on Indian goods from 25% to 18%, while also dropping an additional 25% penalty tariff previously imposed for India's continued purchase of Russian oil.
- Commerce Minister Piyush Goyal defended the deal, stating that the interests of farmers in agriculture and dairy sectors were protected; however, protesters remain unconvinced.
- Unions cited concerns that cheaper US-manufactured goods flooding the Indian market would lead to widespread job losses in labour-intensive sectors.
Static Topic Bridges
India-US Bilateral Trade Relations and Tariff Disputes
India and the United States are among each other's largest trading partners. Bilateral merchandise trade exceeded $190 billion in 2024-25. However, the relationship has been marked by persistent tariff disputes: the US has consistently pushed for greater market access for American agricultural products, dairy, and medical devices, while India has resisted reductions in sectors it considers sensitive. During 2018–2019, the Trump administration withdrew India's Generalised System of Preferences (GSP) benefits ($5.6 billion worth), citing market access barriers.
- India's agricultural sector employs approximately 46.5% of the workforce but contributes around 17-18% of GDP (Economic Survey 2024-25).
- The US provides approximately $19 billion annually in farm subsidies under its Farm Bill — making American agricultural exports far cheaper than market prices.
- India's average applied tariff on agricultural products is approximately 32-33%, one of the highest among G20 nations, partly to protect smallholder farmers.
- India was removed from the US GSP programme in June 2019; this affected $6 billion of Indian exports to the US annually.
- The interim trade deal reduces Indian export tariffs from 25% to 18% (US-bound goods) and drops a 25% penalty for Indian oil purchases from Russia.
Connection to this news: The protests reflect a structural tension at the heart of the India-US trade relationship: India needs to expand exports to the world's largest consumer market, but domestic political economy — particularly farm welfare — constrains how far India can open its agricultural sector.
India's Trade Union Movement and the Right to Strike
India has a large and organised trade union movement. The major central trade unions — INTUC (affiliated to Congress), AITUC (affiliated to CPI), CITU (affiliated to CPM), BMS (RSS-affiliated), and AICCTU — have historically coordinated on issues of wages, labour rights, and trade policy. Under the Trade Unions Act, 1926, workers have the right to form unions; the right to strike is implicitly protected but subject to restrictions in essential services.
- India's four new labour codes (2020) — Code on Wages, Industrial Relations Code, Social Security Code, and Occupational Safety Code — consolidate 44 central labour laws; full implementation pending.
- The Industrial Relations Code, 2020, requires a 60-day notice for strikes in establishments with 300+ workers (up from 100 under the Industrial Disputes Act, 1947).
- The AITUC General Secretary cited dumping of US farm produce as a key concern during the February 2026 Bharat Bandh.
- Trade union protests against trade liberalisation have precedent: similar strikes occurred in 1991 (against LPG reforms), 2012 (against FDI in retail), and 2016 (against labour code consolidation).
Connection to this news: The strengthening protests reflect organised labour's concern that the India-US deal's gains in manufactured goods exports may come at the cost of agricultural and small industry livelihoods — a politically sensitive trade-off ahead of state elections.
Free Trade Agreements: Opportunities and Risks for India
A Free Trade Agreement (FTA) involves the elimination or substantial reduction of tariffs and non-tariff barriers between signatory countries. India has 13 FTAs in force (as of 2026), including ASEAN, South Korea, Japan, UAE, Australia, and now the UK. The India-EU FTA (finalised 2026) and the India-US interim deal represent the most significant recent additions. FTA benefits include expanded export access, foreign investment, and technology transfer; risks include import surges that hurt domestic industries and farmers.
- India's merchandise exports in 2024-25: approximately $437 billion; services exports: approximately $340 billion.
- WTO's Most Favoured Nation (MFN) principle requires equal tariff treatment for all members; FTAs are permitted exceptions under GATT Article XXIV.
- India withdrew from the RCEP (Regional Comprehensive Economic Partnership) negotiations in 2019 due to concerns about Chinese goods flooding the market.
- The India-UK FTA, signed in July 2025, is the most economically significant bilateral FTA for the UK post-Brexit; it reduces tariffs on UK exports to India by up to £400 million annually.
- Piyush Goyal has stated that five FTAs will be operationalised in 2026 (UK, Oman, New Zealand, EU, and the US interim deal).
Connection to this news: The protests against the US deal highlight that domestic stakeholders — farmers, unions — need to be consulted and accommodated for FTAs to achieve political sustainability, even when the macroeconomic case for liberalisation is strong.
Key Facts & Data
- India-US bilateral trade: exceeded $190 billion in 2024-25.
- India's agricultural workforce: approximately 46.5% of total employment.
- US farm subsidies: approximately $19 billion annually under the Farm Bill.
- India's average agricultural tariff (applied): approximately 32-33%.
- US-India interim deal: reduces reciprocal tariff on Indian goods from 25% to 18%; drops 25% penalty for Russian oil purchases.
- India GSP withdrawal by US: June 2019; affected approximately $6 billion of Indian exports annually.
- India withdrew from RCEP: November 2019.
- India's FTAs in force (2026): 13 agreements including ASEAN, UAE, Australia, UK.
- India-UK FTA signed: July 2025; tariff savings for UK: up to £400 million/year.
- Trade Unions Act: 1926 (governs union registration in India).
- Industrial Relations Code, 2020: 60-day strike notice required for establishments with 300+ workers.