On February 6, 2026, United States President Donald J. Trump announced a trade deal with India that will open India’s market of over 1.4 billion people to U.S. products.
- The joint statement follows a call the previous week between President Trump and Indian Prime Minister Narendra Modi in which the leaders reached a framework for an interim agreement on reciprocal trade and reaffirmed their commitment to broader Bilateral Trade Agreement (BTA) negotiations.
- Also on the call, President Trump agreed to remove an additional 25% tariff on imports from India in recognition of India’s commitment to stop purchasing Russian Federation oil. Accordingly, President Trump on February 6 signed an executive order removing the tariff.
- Given India’s willingness to align with the U.S. to confront systemic imbalances in the bilateral trade relationship and shared national security challenges, the U.S. will lower the reciprocal tariff on India from 25% to 18%.
The key terms of the agreement include:
- India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products, including dried distillers’ grains, red sorghum, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.
- India intends to buy more U.S. products and purchase over $500 billion of U.S. energy, information and communication technology, coal and other products.
- India will address nontariff barriers that affect bilateral trade in priority areas. The U.S. and India will negotiate rules of origin that ensure that the agreed benefits accrue predominantly to the U.S. and India.
- India committed to negotiate a robust set of bilateral digital trade rules that address discriminatory or burdensome practices and other barriers to digital trade.
- The U.S. and India committed to strengthen economic security alignment to enhance supply chain resilience and innovation through complementary actions to address nonmarket policies of third parties, as well as cooperating on inbound and outbound investment reviews and export controls.
- The U.S. and India will significantly increase bilateral trade in technology products and expand joint technology cooperation.
The two nations agreed to promptly implement the framework and work toward finalizing the interim agreement with a view to concluding a mutually beneficial BTA. In line with the road map set out in the BTA’s terms of reference, the U.S. and India will continue negotiations to address the remaining tariff barriers, additional nontariff barriers, technical barriers to trade, customs and trade facilitation, good regulatory practices, trade remedies, services and investment, intellectual property, labor, environment, government procurement, and trade-distorting or unfair practices of state-owned enterprises.
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