India-US Trade Deal: A Historic Agreement with Mixed Consequences
India–US trade deal LIVE updates: US President Donald Trump said on Monday that the United States and India have reached a trade deal which will enable a cut in tariffs on Indian goods. Under the agreement, Washington will lower its reciprocal tariff on Indian goods to 18% and remove the additional 25% penalty that was imposed over India’s purchase of Russian oil. Trump, who called Modi “one of my greatest friends,” said India also agreed to cut its tariffs on US goods to zero and remove non-tariff barriers. However, the tariff reduction is in return for several commitments from India — the biggest one being a promise to stop buying oil from Russia and a tariff reduction to zero. It is important to note that no official document has been released on the counters of the deal and the details of what it may include is only trickling down from the US government. India has not shared the exact details. India’s commerce minister Piyush Goyal called the deal a ‘historic turning point’, saying “This agreement unlocks unprecedented opportunities for farmers, MSMEs, entrepreneurs, and skilled workers to Make in India for the world, Design in India for the world, and Innovate in India for the world. It will help India get technology from the US.” India currently imports around 1.5 million barrels of Russian oil every single day, according to Kpler, a global trade data firm. Russian oil now makes up more than one-third of all the oil India imports. Trump announced that tariffs would be reduced to 18% from as high as 50% after a phone call with Prime Minister Narendra Modi, calling it a “historic” trade deal. The agreement marks a major turnaround in ties between the two countries, which had fallen to their weakest level in more than 20 years. After a phone call with Modi Trump said, “He (Modi) agreed to stop buying Russian oil, and to buy much more oil from the United States and, potentially, Venezuela.” That’s when he agreed to a trade deal that would see India cutting tariffs to zero and ceasing Russian oil imports. Trump also claimed that Modi has committed to buying more than $500bn worth of American goods including energy, technology, agriculture and coal products. “It was an honour to speak with Prime Minister Modi,” Trump said. He added that India had agreed to stop buying Russian oil and commit to purchasing more than $500 billion worth of US energy, technology, and agricultural products. Prime Minister Modi welcomed the announcement, saying he was “delighted” that tariffs on Made in India goods had been reduced. He described the deal as positive for both democracies, but avoided mentioning Russian oil in his statement. The breakthrough comes just days after India finalised a long-pending free trade agreement with the European Union. Last August, Trump doubled tariffs on Indian imports to 50% to pressure New Delhi to stop buying Russian oil. Earlier this month, he warned tariffs could rise again. India is the world’s third-largest oil importer and depends on imports for about 90% of its oil needs. According to Reuters, Indian purchases of Russian oil fell to about 1.2 million barrels per day in January and are expected to drop to 1 million in February and 800,000 in March. Trump has also floated the idea of India buying Venezuelan oil. The Trump administration it will reduce India's tariffs on American industrial goods to zero from 13.5% and eliminate duties, but allow India to maintain some agricultural import protections, U.S. Trade Representative Jamieson Greer said on Tuesday. Greer told CNBC in a live interview that the U.S. would continue to work on access to certain protected areas of India's agriculture sector, but said India's tariffs "for a variety of things, you know, tree nuts, wine, spirits, fruits, vegetables, etc, they're going down to zero." Assam CM Himanta Biswa Sarma on Tuesday termed the India-US trade deal as "historic", and said the agreement will benefit the country's entrepreneurs, farmers, skilled workers and MSMEs. In a series of posts on X, Sarma lauded Prime Minister Narendra Modi for a breakthrough in the tariff stalemate between India and the US over the imposition of duties. "The agreement reached between Adarniya @narendramodi ji and President @realDonaldTrump on the #indiaus Trade Deal is historic. It unlocks opportunities for India's entrepreneurs, farmers, skilled workers and MSMEs and opens new doors for them," he said. Rajya Sabha Member Sana Satish Babu on Tuesday said the India-US trade deal is a "game changer" which secured reduced American taxes on Indian products. The Rajya Sabha MP said that the US has agreed to bring down tariffs on Indian goods to 18 percent. "I convey my heartfelt congratulations to Prime Minister Modi for achieving yet another historic international economic victory for India," Babu said in a press release. The Trump administration is working on memorialising the trade agreement announced on Monday with India, US Trade Representative Jamieson Greer said in an interview on CNBC on Tuesday. "We'll finish papering it, but we know the specifics, we know the details," Greer said. "It's a very exciting opportunity. On the one hand, we'll continue to maintain some level of tariff against India... but they've also agreed to reduce their tariffs for us on a variety of agricultural products, manufactured goods, chemicals, medical devices, etc," US Trade Representative Jamieson Greer said. #watch | Jammu, J&K: On the India-US trade agreement, PDP leader Waheed Para says, "The horticulture industry of Jammu and Kashmir is our backbone. If the Indian government is going to enter into any agreement that will directly affect the apple crop, then we appeal to the… pic.twitter.com/rv0PaQPhcY “The reduction in tariffs from around 50% to 18% has come in materially better than consensus expectations. When combined with the recently concluded India–EU trade agreement, this potentially represents one of the strongest external growth stimuli for the Indian economy in 2026," Trideep Bhattacharya President and CIO Equities Edelweiss MF said. The US tariff reduction is a significant tailwind and a double win for the industry, especially when paired with the recent EU FTA. It moves us decisively from recovery mode to actively re-engaging with the US market at a greater scale, Rajamanohar Somasundaram, Founder & CEO at Aquaconnect, said. #watch | Delhi: On the India-US trade agreement, Union Minister of Commerce and Industry, Piyush Goyal, says, "...Today every Indian across the country is thanking Prime Minister Narendra Modi that he has made a very good trade deal with the United States of America, which the… pic.twitter.com/ji5DHgRQWN Speaking about the India-US trade deal, Union Commerce Minister Piyush Goyal claimed PM Modi had ensured that India's sensitive sectors — agriculture and dairy — were safeguarded and given attention in the deal. “Fishermen who export seafood celebrated in all coastal regions after the deal. This is a sign of how this deal heralds a bright future for India,” he claimed. "This deal will help everyone, all 140 crore Indians, from farmers to fisherfolk," Union Commerce Minister Piyush Goyal said. He added that the deal secured is the best one among all other countries in the region. #watch | On India-US Trade Agreement, DMK MP Kanimozhi says, "There is no clarity. Everything has been announced by the US President. We don't know what is actually in it. We would like to know if the farmers of this country have been protected. What is this deal about.… pic.twitter.com/UMNjiVnif0 #watch | Delhi | After being suspended from the Lok Sabha for this session, Congress MP Gurjeet Singh Aujla says, "...Lok Sabha LoP Rahul Gandhi expressed his worry regarding the security of the nation...They never allow him to speak...They switch off all the mics...We have put… pic.twitter.com/E5YxySQpGh #watch | Delhi | LoP, Lok Sabha, Rahul Gandhi says, "Modi ji is rattled. The (US-India) trade deal, which was stalled for the past few months, was signed by Narendra Modi last night. There is extreme pressure on him. Narendra Modi ji's image can get damaged. The main thing is… pic.twitter.com/0z6fLFGV0p #watch | Delhi | On India-US trade agreement, Congress MP Shashi Tharoor says," I want to know what it contains. The Opposition is only asking for clarity. We don't know what the deal contains. We have Mr Trump's tweet and Mr Modi's tweet; is that enough in a parliamentary… pic.twitter.com/2XJMnnIUZu On the India–US trade agreement, Congress MP Shashi Tharoor said, "I want to know what it contains. The Opposition is only asking for clarity. We don't know what the deal contains. We have Mr Trump's tweet and Mr Modi's tweet; is that enough in a parliamentary democracy? Shouldn't the Govt of India come and explain to the people of the country what's in the deal? Mr Trump says it's for agriculture, so what are the protections for Indian farmers? Mr Trump says USD 500 billion, our entire import bill is USD 700 billion, so do we stop buying from every other country? We would love to celebrate if it's good news, but give us clarity..." Rudra Kumar Pandey, Partner at Shardul Amarchand Mangaldas & Co, the US decision signals a de-escalation in bilateral trade frictions and reflects aligned strategic intent. He noted that the move strengthens India’s export competitiveness, supported by recent customs duty rationalisation and a broader shift in US supply chains away from China. "The immediate gains will be concentrated in tariff-sensitive and labour-intensive sectors that are most responsive to marginal duty changes," Pandey said. "Textiles and apparel, gems and jewellery, leather and footwear, engineering goods, and auto components stand to benefit disproportionately, as these sectors compete directly with Vietnam and Bangladesh in the US market." Russia on Tuesday said it has received no communication from India suggesting that New Delhi plans to stop buying Russian oil, pushing back against a claim made by US President Donald Trump a day earlier. The Kremlin said it was unaware of any change in India’s oil procurement strategy following Trump’s remarks about a new India–US trade deal. "So far, we haven't heard any statements from New Delhi on this matter," Kremlin spokesman Dmitry Peskov told reporters, according to AFP. Trump had earlier claimed that Prime Minister Narendra Modi agreed to halt purchases of Russian oil as part of broader discussions that included tariff reductions and increased imports from the United States and potentially Venezuela. "We spoke about many things, including Trade, and ending the War with Russia and Ukraine," Trump said. "He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela." India has not publicly confirmed any such commitment. While Prime Minister Modi welcomed the tariff reduction in a social media post, he made no reference to Russian oil. Leader of Opposition Rahul Gandhi on Tuesday reacted sharply to the India-US trade deal announced the previous night, accusing Prime Minister Narendra Modi of compromising India’s interests. “Narendra Modi ji has sold your hard work in this trade deal because he is compromised. He has sold the country,” Gandhi said while speaking to reporters outside Parliament after walking out of the Lok Sabha. His remarks came after his speech was disrupted by BJP-led NDA members, forcing an adjournment of the House. Rating agency Moody’s on Tuesday said the reduction in US tariff rates on most Indian goods is credit positive for labour-intensive sectors such as gems, jewellery, textiles and apparel, which are among India’s top export segments. In a statement, Moody’s said the trade deal will reinvigorate India’s goods export growth to the US, which remains the country’s largest goods export market, accounting for about 21 per cent of India’s total goods exports in the first 11 months of 2025. “Lower tariff rate will also be credit positive for labour-intensive sectors such as gems, jewellery, textiles and apparel, which rank the top export sectors,” it said. However, pharmaceuticals and consumer electronics, the other two major export sectors, had been exempt from the 50 per cent high tariffs imposed by the US and are therefore unlikely to be affected by the reduction. The rating agency also noted that while India has reduced its purchase of crude oil from Russia in recent months, it is unlikely to halt all purchases immediately as that could disrupt economic growth. “A complete shift toward non-Russian oil could also tighten supply elsewhere, raise prices and pass through to higher inflation given that India is one of the world's largest oil importers,” Moody’s said. #watch | Delhi: On the India-US trade agreement, Rajiv Memani, President of the Confederation of Indian Industry (CII), says, "It's a positive development. The US is one of the world's largest economies, and for India, it is the largest trading partner. Due to tariffs, some… pic.twitter.com/v3jfrTphKH Lok Sabha adjourned till 3 pm after BJP MPs objected to LoP Rahul Gandhi raising the issue of China during the debate on the motion of thanks to the President's address. Speaking in Lok Sabha, LoP Rahul Gandhi says,"A very important matter in the President's speech is a matter relating to national security. Our relationship between the Pakistanis, the Chinese, and us. There is a very important point in this article that I have authenticated. It… pic.twitter.com/sz58O1XtHx Union Minister Kiren Rijiju on Tuesday hit out at the Congress party, accusing it of disrupting Parliament and spreading misinformation, particularly over the India-US trade agreement. Speaking to reporters, Rijiju said he had clearly conveyed to Congress leaders that Leader of Opposition Rahul Gandhi would be allowed to continue his speech in the Lok Sabha. However, he stressed that certain remarks were not acceptable under parliamentary rules. “I have just told the leaders of Congress that LoP Rahul Gandhi can continue his speech. However, what the former army chief did not say, what is not true, and what is not permitted under the rules should not be forced upon the House,” Rijiju said. He added that Rahul Gandhi should refrain from making such statements, as it affects the opportunity of other MPs to speak. “He should not try to say such things, as this diminishes the chances of other party MPs speaking,” the minister noted. #watch | Delhi: Union Minister Kiren Rijiju says, "I have just told the leaders of Congress that LoP Rahul Gandhi can continue his speech. However, what the former army chief did not say, what is not true, and what is not permitted under the rules should not be forced upon the… pic.twitter.com/svTN5g4oF0 On India-US trade agreement mentioning agriculture, Former Foreign Secretary and Rajya Sabha MP Harsh Vardhan Shringla says, "Some items will come from the US, but they will not threaten our agriculture. I don't see any contradiction or any problem that our farmers could face." #watch | On India-US trade agreement mentioning agriculture, Former Foreign Secretary and Rajya Sabha MP Harsh Vardhan Shringla says, "Some items will come from the US, but they will not threaten our agriculture. I don't see any contradiction or any problem that our farmers could… https://t.co/a68YFjWgYT Ashish Chauhan, CEO and MD of the National Stock Exchange, praised the India-US trade agreement, calling it “pretty much the best deal possible” for the Indian economy. VIDEO | Mumbai: On Indo-US trade deal announcement, Ashish Chauhan, Managing Director and CEO of the National Stock Exchange of India, says, “I believe this is pretty much the best deal possible. We have been waiting for it for almost a year since President Donald Trump took… pic.twitter.com/HQfBUyscwq Reuters report citing the Indian government official said the deal includes “market access for some agricultural products,” although details are not yet public. India has previously offered selective access to its farm markets under deals with the European Union. Experts caution that agriculture remains a sensitive sector, and small farmers could be affected if imports increase. India has agreed to buy petroleum, defence goods, aircraft, telecom, and pharmaceuticals from the United States under a trade deal, while partially opening up its carefully guarded agriculture sector, the government official said, according to Reuters. A senior government official told Reuters that India has agreed to purchase American products such as telecom equipment and medicines. The official added that India has also offered limited market access for certain farm products as part of its commitments under the agreement. India’s historic trade deal with the US, cutting tariffs from 50% to 18%, has sparked a mix of celebration and caution in New Delhi. While sectors like textiles and jewellery are set to benefit, experts warn that Indian agriculture could bear the brunt of the deal. The deal signals a potential surge of US farm products into India. Cheap imports like corn, soybean oil, dairy, almonds, and apples could reach domestic markets if India moves toward “zero tariffs” for certain US goods, putting pressure on small-scale Indian farmers. Agriculture experts and think tanks, including Ajay Srivastava of GTRI, urge caution, noting that sensitive sectors such as food grains and GM products may face exposure if details are not carefully managed. Read More: ‘Big win for US farmers’ means a loss for India? How Agriculture experts are reacting to trade deal Congress MP Randeep Surjewala hit out at the government in Rajya Sabha, saying the entire Opposition demanded clarity on the India-US trade agreement announced by US President Trump and the US Secretary of Agriculture. “In one voice, the Opposition asked the government to explain the deal,” Surjewala said. “It is a grave misfortune that after the three black farm laws, the Modi government now appears ready to allow US agricultural products to enter India at zero percent duty. There can be no bigger betrayal for our farmers.” He warned that duty-free imports of US cotton, maize, wheat, dairy products, almonds, and apples could threaten the livelihoods of millions of Indian farmers. Surjewala demanded that the government present the full agreement on the floor of the House. “How the interests of Indian farmers were traded in the dark must be debated openly. But as usual, the BJP wants to cover it up. This cannot be tolerated, so the Opposition protested and walked out,” he added. Sabha on Tuesday amid Opposition demands for clarity on the agreement. Responding to MPs raising the issue in the House, Nadda referred to the exchange between the two leaders late Monday night. “The US President tweeted on tariffs and described Prime Minister Modi as a true friend. The Prime Minister then responded, thanking the US President and speaking about trade,” he said. Nadda added that the government would make a suo motu statement on the deal and allow a discussion in Parliament once it is ready to present a detailed account of the agreement. Even after the India–US trade deal, India is unlikely to suddenly stop buying oil from Russia. That’s the clear message from Moody’s Ratings, which has warned that an abrupt break could hurt India’s economy and push up prices. In a note released on Tuesday, Moody’s said that while India has already reduced its Russian crude purchases in recent months, cutting them off completely and immediately would be risky. “Even though India has reduced its purchase of crude oil from Russia in recent months, it is unlikely to cease all purchases immediately which could be disruptive to India’s economic growth,” the ratings agency said. Moody’s also flagged the inflation risk. It said shifting fully to non-Russian oil at once could tighten global supplies and make crude more expensive — a concern for a country like India, which is among the world’s biggest oil importers. “A complete shift toward non-Russian oil could also tighten supply elsewhere, raise prices and pass through to higher inflation,” Moody’s warned.
