India-USA Trade Deal 2026:
India and the US have reached a landmark trade deal in February 2026, significantly reducing tariffs to 18% and ending a period of intense trade friction between the two nations.
- The India-USA Trade Deal 2026 is a strategic economic reset announced by President Donald Trump and Prime Minister of India on February 2, 2026.
- This reciprocal agreement aims to de-escalate the trade war triggered in late 2025, providing Indian exporters a competitive edge in the American market while securing massive energy and agricultural commitments for the United States.
Key Features of the Deal:
- The US has slashed effective tariffs on Indian goods from a peak of 50% down to 18%.
- The additional 25% penalty—previously imposed due to India’s Russian oil imports—has been scrapped.
- India has agreed to significantly reduce or halt Russian oil purchases, shifting procurement to the US and potentially Venezuela.
- India has pledged to purchase $500 billion worth of US energy, agriculture, coal, and technology products (likely over a multi-year period)
- India will work toward reducing its own tariffs and non-tariff barriers on US industrial goods toward zero.
- India has successfully excluded sensitive dairy and core agricultural sectors (like staple crops) from the deal to protect domestic farmers.
- The deal leverages India’s SHANTI Act, 2025, allowing US firms greater access to India’s civil nuclear and data center markets.
- India now enjoys a tariff rate (18%) better than regional competitors like Vietnam, Bangladesh, and Pakistan (facing 19–20%).
