A Trade Deal on Paper, a Balance Sheet Move in Practice

It has become Amandeep Midha’s habit to uncover nuances in events that many commentators overlook in their early readings. As his previous articles show, he keeps a sharp eye on geo‑political matters. In his latest piece on the India–US trade deal, his central idea is that the tariff agreement is, in fact, a way of spending reserves without announcing it. To us, this is an original and compelling insight—one that moves the discussion beyond trade arithmetic into the realm of strategic finance. We invite you to read on and appreciate what we mean.

A Trade Deal on Paper, a Balance Sheet Move in Practice

Amandeep Midha 

The recent India–U.S. tariff reductions are being presented as a conventional trade agreement. Official statements and social media commentary emphasise lower duties, improved market access and renewed momentum in bilateral commerce. That framing is convenient, but it misses the more interesting part of the story. What looks like a trade deal on paper also functions as a carefully structured spending decision.

Spending Reserves Without Saying So

India holds a significant portion of its foreign exchange reserves in U.S. Treasuries. This has long been a default choice rather than a strategic preference. Treasuries offer liquidity and safety, but they are ultimately passive holdings that generate limited strategic leverage.

By committing to higher purchases of U.S. energy and other American exports, India is effectively converting part of its dollar reserves into real goods. This can be read as a routine trade adjustment. It can also be read, more accurately, as a controlled way of deploying U.S. Treasury-backed liquidity without triggering market anxiety or political friction.

Calling this a trade deal makes the move easier to digest for all parties involved. The United States can present higher exports as a policy success. India avoids the optics of reserve reallocation. Markets remain calm.Everyone gets what they need in the short term.

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From the U.S. perspective, increased exports support domestic industry, energy producers and employment. From India’s perspective, energy imports support growth, reduce supply risk and gradually shift reserves away from purely financial instruments.

There is no contradiction here. If a country can reduce its exposure to long-term debt holdings by purchasing strategic inputs, and if that same transaction boosts the exporting country’s trade numbers, there is little reason not to pursue it. This is not an act of defiance. It is a mutually acceptable transaction framed in a way that suits both political systems.

The Question Left Open

What remains deliberately unanswered is whether India will rebuild its U.S. Treasury holdings at the same pace in the future. That question does not need an immediate answer, and arguably should not have one.

Reserve accumulation and allocation respond to global conditions, not press releases. If financial markets stabilise and geopolitical risk recedes, Treasuries may again look attractive. If uncertainty deepens, real assets and diversified holdings will continue to play a larger role. Leaving that choice open is itself a strategic decision.

Pragmatism Over Posturing

The significance of the current moment lies not in tariff percentages but in how financial flexibility is exercised. India has chosen a path that allows spending reserves without announcing it, supporting a key partner without locking itself into long-term financial dependence.

It is a reminder that economic strategy today is less about declarations and more about accounting choices. The most effective moves are often the ones that can be explained as something else.

Whether India once again increases its exposure to U.S. Treasuries is a debate for the future. For now, the decision to treat a trade deal as a balance sheet opportunity reflects a pragmatic reading of a changing global economy.

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Amandeep Midha is a technologist, writer, and global speaker with over two decades of experience in digital platforms building, data streaming, and digital transformation. He has contributed thought leadership to Forbes, World Economic Forum, Horasis, and CSR Times, and actively engages in technology policy-making discussions. Based in Copenhagen, Amandeep blends deep technical expertise with a passion for social impact and storytelling.