For months, the India–US trade deal has existed in a strange diplomatic limbo—sealed in substance, frozen in time. Tariffs negotiated. Market access aligned. Political buy-in secured on both sides.
And yet, no signing. No announcement. No victory lap.
According to multiple people familiar with the talks, the reason lies far beyond customs schedules and trade chapters. The fate of the India–US trade pact, they say, is now tied to a far bigger theatre—the unresolved war between Russia and Ukraine.
In private, the message circulating in Washington, Brussels and Delhi is stark: no Russia–Ukraine peace signal, no India–US trade celebration.
Mar-a-Lago and the Theatre of “Almost Peace”
The drama sharpened in late December, when President Donald Trump hosted Ukrainian President Volodymyr Zelensky at Mar-a-Lago.
The optics were unmistakable. Trump spoke of talks being in their “final stages.” Zelensky hinted that a framework was “largely agreed,” while carefully avoiding specifics on territory and security guarantees—the two red lines that still divide Kyiv, Moscow and Europe.
What was not said publicly mattered more.
Hours before Zelensky arrived, Trump reportedly communicated directly with Moscow, reinforcing Washington’s role not as a mediator on the sidelines, but as the director of the endgame. European capitals were informed, not consulted.
The signal markets picked up was not that peace had arrived—but that the choreography had begun.
And in that choreography, India quietly occupies a pivotal role.
Europe’s Fury, India’s Oil—and Washington’s Dilemma
European leaders have grown increasingly vocal—and uneasy.
Their argument is blunt: how can the United States reward India with a trade deal capped at 15 percent tariffs while Europe continues to absorb the economic pain of sanctions, energy shortages and industrial disruption caused by the war?
At the heart of the resentment is oil
India’s continued purchase of discounted Russian crude has been tolerated, even as Washington imposed punitive 25–50 percent tariffs on Indian exports explicitly linked to those purchases. Sanctions on major Russian energy players have added further pressure.
And yet, in January, Reliance Industries was quietly allowed a one-month window to continue Russian oil purchases without penalties—a technical accommodation that insiders describe as temporary, deliberate, and politically timed.
In Brussels, Berlin and Paris, this has only reinforced the suspicion: India is being positioned as the post-war economic beneficiary, while Europe waits for a peace deal that justifies its sacrifices.
This is the bone of contention now constraining Washington.
Without a Russia–Ukraine peace framework—even a partial one—the optics of unveiling an India–US trade deal become politically radioactive in Europe.
Why the Trade Deal Is Ready—but Not Released
People involved in the negotiations say the India–US trade pact is “done in principle.”
The broad outlines are clear:
A tariff cap around 14 percent to 15 percent
Rollback of several punitive duties imposed during earlier trade confrontations
Improved market access for Indian exports
Strategic alignment in energy, technology and clean manufacturing
What is missing is the moment.
Washington does not want the headline: “US Rewards India While War Rages On.”
Instead, it wants a different sequence:
A Russia–Ukraine peace framework or roadmap
Signals of sanctions rationalisation
European leaders brought on board, however reluctantly
Then—almost immediately—the India–US trade announcement, framed as proof that global economic normalcy is returning
In short, the trade deal has become the prize unlocked by peace.
Markets Are Already Writing the Script
For investors, this is no longer abstract diplomacy. It is a pending trade.
Three sectors sit directly in the blast radius of an announcement:
Solar and Clean Energy
Indian solar manufacturers have been crippled by steep US tariffs and investigations, leaving factories under-utilised and exports stalled. A trade reset would reopen the US market overnight, turning India into a critical supplier in America’s energy transition push.
The market understands this. Stocks will not wait for export numbers—they will re-rate on the announcement.
Energy and Oil-Linked Plays
A peace framework would ease pressure on Russian crude flows and sanctions enforcement, stabilising refining margins and energy costs. Simultaneously, closer US ties open doors for LNG contracts, technology transfers and joint energy investments.
Energy stocks would trade not on earnings—but on geopolitics.
Textiles and Labour-Intensive Exports
With global buyers diversifying away from China, India stands uniquely positioned—if tariffs fall. A 15% cap changes competitiveness overnight, making Indian textiles a preferred alternative for Western markets.
This is why fund managers are watching press briefings, not balance sheets.
The Moment Everyone Is Waiting For
The tension now lies in timing.
There is widespread expectation that January will bring a Russia–Ukraine peace signal—not necessarily a final settlement, but a framework substantial enough to declare the war’s endgame has begun.
When that happens, insiders say, the India–US trade deal will follow almost immediately.
Not weeks…Not months…Days…
In that sense, the trade deal is no longer a bilateral economic agreement. It is part of a global narrative reset—a declaration that war, sanctions and fractured supply chains are giving way to a new order.
For India, the wait is strategic…For Washington, it is theatrical…For markets, it is combustible.
And until peace is announced—however imperfect—the India–US trade deal will remain exactly where it is today: signed in spirit, sealed in secrecy, and waiting for the world to change.