NEW DELHI — India and the United States said they have reached an India-US trade deal that would cut U.S. duties on Indian goods to 18% and set a path for India to buy about $500 billion in American products over five years, with the first tranche expected to be signed by mid-March, Feb. 5, 2026.
Officials say the agreement aims to defuse a tariff standoff that intensified in 2025 and to rework energy and market-access commitments as Washington presses New Delhi to curb purchases of Russian oil.
India’s commerce minister, Piyush Goyal, said a joint statement outlining the initial package is expected within days, after which the U.S. tariff rate would be lowered. Reuters reported the first tranche could include major aircraft, energy and defense purchases alongside India’s concessions on select trade barriers.
What the India-US trade deal changes
The headline figure is the 18% U.S. tariff level, down from a combined 50% that included a punitive layer tied to India’s Russian oil imports. The White House has framed the reduction as part of a broader effort to squeeze Russian revenue and reshape supply chains, while India has presented it as relief for exporters and a step toward stabilizing bilateral commerce. The Associated Press detailed the announcement and the linkage to India’s energy choices.
Both sides have offered only partial specifics so far, and analysts say the practical impact will depend on what products qualify for the lower rate, how quickly it is implemented and whether carve-outs remain for sensitive sectors. In a note on the early contours, the Council on Foreign Relations said the arrangement de-escalates a dispute that strained ties for months but leaves important questions on scope and enforcement.
On India’s purchase commitments, officials have pointed to energy, aircraft, defense goods and industrial inputs as the biggest categories. India’s government has also signaled it will protect sensitive domestic interests, including farmers, while offering calibrated access and procedural easing for U.S. exporters. Business Standard reported that New Delhi is highlighting diversification of crude sourcing as part of its broader positioning.
How the India-US trade deal fits a longer arc
The current India-US trade deal follows years of stop-start negotiations marked by flare-ups over tariffs and market access. In 2019, the U.S. formally moved to end India’s preferential access under the Generalized System of Preferences, a step that hardened trade politics on both sides. USTR’s 2019 release outlined that decision.
More recently, leaders agreed to pursue “Mission 500,” a goal of lifting two-way trade to $500 billion by 2030, setting a political target that negotiators have repeatedly referenced as a north star. The White House joint leaders’ statement laid out that ambition.
But talks frayed in 2025 as tariff threats mounted and disagreements persisted over agriculture, dairy and energy. A Reuters timeline described how the dispute escalated into the 50% tariff level now being rolled back.
For now, the India-US trade deal remains a framework with key details still being “papered,” as officials put it. Businesses and investors will be watching for the joint statement, product lists and implementation dates that will determine whether the tariff reset delivers the export boost India wants and the purchase commitments Washington is seeking.
