India Clinches US Trade Deal While South Africa Remains on the Sidelines

India has secured a major trade agreement with the United States (US) that delivers immediate tariff relief and opens the way for deeper investment and commercial ties. The contrast with South Africa is stark.

Under a deal announced on Sunday by President Donald Trump and Prime Minister Narendra Modi, Washington agreed to cut punitive tariffs on Indian goods to 18%, down from levels that had approached 50%, and to remove an additional 25% surcharge imposed over India’s earlier purchases of Russian oil. In return, New Delhi committed to halting those Russian oil purchases, lowering barriers to US exports, and expanding imports of American energy, defence equipment, aircraft, and technology.

For South Africa, whose economy remains in the doldrums with a growth rate of under 2% and an unemployment rate of over 30%, the deal underscores a stark failure. By comparison, India, which is set to maintain an economic growth rate of over 7% and an unemployment level of under 5%, chose to secure a deal.

The divergence lies not in timing or circumstance, but in choice.

India’s relationship with the US was put under strain in mid-2025 when the Trump administration imposed steep tariffs to pressure New Delhi over its continued imports of cheap Russian oil. Rather than escalating the dispute or recasting it as an ideological confrontation, the Modi government treated the confrontation as a commercial and strategic problem to be resolved. India adjusted its energy sourcing, signalled willingness to realign key trade positions, and entered negotiations aimed at restoring access to the US market. The result is a deal positioning India for expanded trade and deeper integration with the world’s largest economy.

South Africa faced a parallel test. As Trump returned to office in early 2025, Washington began reassessing trade relationships with countries enjoying preferential access while simultaneously opposing US interests on the global stage. South Africa, a beneficiary of the African Growth and Opportunity Act (AGOA), quickly drew attention for its foreign-policy posture, including its positions on Russia, Iran, and Israel, and its voting record at the United Nations.

Instead of recalibrating, the African National Congress (ANC)-led government hardened its stance. Senior officials rejected US concerns as interference, framed trade pressure as coercion, and continued rhetoric that cast Washington as an adversary rather than a partner. While India moved to remove the source of conflict, South Africa treated the dispute as a matter of principle and political identity. As a result, Pretoria found itself not negotiating a new trade deal, but defending its continued eligibility for existing preferences.

The economic consequences of that divergence are becoming clearer. India exits the dispute with reduced tariffs, clearer investment prospects, and a strengthened commercial relationship with the US. South Africa faces persistent uncertainty over AGOA access, growing caution among American businesses that import South African goods, and rising reluctance from investors who see trade and growth subordinated to ideology.

What makes the comparison unavoidable is that both countries were tested by the same US administration, at the same moment, under the same transactional trade doctrine. Washington did not apply different standards. In both cases, pressure was used to advance US economic and strategic interests. India responded with pragmatism. South Africa responded with defiance.

The India-US agreement illustrates a broader lesson for emerging economies seeking growth through global trade. Access to US markets and capital is not secured by history, sentiment, or moral positioning. It is earned through alignment, negotiation, and an understanding of how power operates in the global economy. India recognised this reality and adjusted. South Africa, under the ANC, has so far chosen not to.

The result is stark. One country is celebrating a deal that promises growth and investment. The other remains on the sidelines, still insisting that ideology matters more than outcomes, even as its economy struggles to secure either.