Why the India-US trade deal is grabbing attention across globe

India and the US reached a major trade deal as Donald Trump cut tariffs to 18%, expanded US exports, and made bold claims on India’s Russian oil imports.

The US president Donald Trump and India’s PM Modi agreed to restart trade negotiations after ending months of tit-for-tat tariff hikes, reducing tariffs and incentivizing exports to the US in what could become a boon for Indian exporters.

From Tariffs to Energy Ties: Trump-Modi Deal Resets India-US Trade Relations

US President Donald Trump and Indian Prime Minister Narendra Modi reached a trade deal in early February 2026.
The agreement rolls back punitive tariffs imposed by Trump last year and reduces India’s import tax level to India to 18% from prior highs of 50%.
Trump said the deal would increase India’s imports of US goods, including energy, commercial aircraft, and other technologies.
Trump also claimed India would stop buying oil from Russia.

Breaking Down the US-India Trade Deal

Tariffs between the US and India had been escalating until last month, with Trump imposing tariffs as high as 50% on Indian imports in December. India had responded in kind by slapping its own duties on US products, leading to negotiations between the two countries.

Trade Deal Highlights

Here are the key details about the pact:

Tariff Reduction. Last month Trump had imposed tariffs of up to 50% on Indian goods. For Indian imports, the US is eliminating the “retaliatory” tariff and lowering the baseline tariff to 18%.

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Increased Trade. Trump said that the deal with India would result in increased trade with India on items such as energy, aircraft, and other products.

End of Russian Oil Imports? In addition to the announcement about increased trade, Trump also claimed that India would stop buying oil from Russia. However, there has been no official confirmation from India that it will halt its imports of Russian oil.

What’s Next for India-US Trade?

Stock markets reacted positively to the tariff rollback with the Indian rupee rising by as much as 1.4% against the dollar – its largest single-day jump in more than seven years.

Indian Exporters

Indian exporters of textiles, leather, and agricultural products are expected to benefit from the rollback in tariffs.
Indian exporters of basmati rice and edible oils are celebrating the news.
Trump reportedly planned to discuss energy and other sectors with PM Modi in June.

Indian Critics

Indian opposition lawmakers have demanded more transparency over the deal text.

“The government should tell us how many sectors have been given tariff concessions,” said Congress spokeswoman Ajay Maken.