President Donald Trump walks on the South Lawn upon his arrival to the White House, Sunday, Feb. 1, 2026, in Washington. (AP Photo/Jose Luis Magana)
Key Facts
• February 2, 2026: US President Donald Trump and Indian Prime Minister Narendra Modi held a phone call.
• US agreed to reduce tariffs on Indian products from 25% to 18%.
• India agreed to purchase over 500 billion USD worth of US products.
• India will stop buying Russian crude oil; punitive 25% tariff on such imports to be removed.
• January 27, 2026: India signed a large trade agreement with the European Union after 20 years of negotiation.
• Modi expressed great satisfaction with the US trade agreement on social media.
• The call also covered the Russia-Ukraine war and energy cooperation.
• Modi agreed to buy more crude oil from the US and possibly Venezuela.
• The US raised tariffs on Indian products to 50% in August 2025, including a 25% penalty tariff related to Russia.
• White House confirmed removal of Russia-related tariffs and reduction of other tariffs to 18%.
• US small business group criticized the deal, noting tariffs remain six times higher than pre-2025 levels.
• US stock market rose slightly after the announcement.
Summary
On February 2, 2026, US President Donald Trump and Indian Prime Minister Narendra Modi agreed in a phone call to lower US tariffs on Indian goods from 25% to 18%, while India committed to purchasing over 500 billion USD in US products, including energy, technology, and agricultural goods. India also agreed to halt purchases of Russian crude oil, leading to the removal of a punitive 25% tariff. This agreement follows India’s recent major trade deal with the European Union. The leaders discussed broader geopolitical issues, including the Russia-Ukraine conflict and energy cooperation. Despite welcoming the deal, some US small business groups criticized the tariff levels as still significantly higher than before 2025. The announcement was positively received by the US stock market. This deal marks a significant step in easing US-India trade tensions that escalated after the US raised tariffs on Indian products to 50% in 2025.
