Trump Says US-India Trade Deal Cuts Tariffs & Reshapes Energy Ties

U.S. President Donald Trump said on February 2, 2026, that the United States and India have reached a trade agreement aimed at lowering tariffs and stabilising a relationship strained by months of retaliatory measures and policy disputes.

According to Trump, the agreement will reduce U.S. tariffs on Indian goods to about 18%, down from levels that had climbed to roughly 50% in 2025.

The steep duties were imposed during a period of escalating trade tensions that followed disagreements over market access, trade balances, and India’s continued purchases of Russian oil.

• Trump says US-India trade deal cuts tariffs and resets strained economic ties
• India to boost US energy imports as tariffs fall under new trade agreement
• US and India signal trade reset after months of tariff and policy disputes

In exchange for the tariff reduction, India has committed to stopping imports of Russian oil and increasing purchases of U.S. energy supplies, including crude oil. Trump said India would also lower trade barriers on American products and significantly expand its purchases from U.S. suppliers.

The announcement followed a phone call between Trump and Indian Prime Minister Narendra Modi. Trump said the agreement would create “fairer trade” and improve U.S. exports to India. Modi welcomed the decision to cut tariffs, calling it a constructive step for bilateral trade relations.

Trade relations between the two countries had deteriorated sharply last year. Washington first introduced “reciprocal” tariffs, then added penalties linked to India’s energy ties with Russia. The measures affected a wide range of Indian exports and raised concerns among manufacturers, exporters, and investors.

Indian markets reacted positively after the announcement. Equity indices rose and the rupee strengthened, reflecting relief that the dispute may ease and reduce uncertainty for exporters and foreign investors.

Details on the timing, legal structure, and enforcement of the agreement have not yet been released. Industry groups said clarity on implementation will be critical, particularly for sectors that were hit hardest by the earlier tariff hikes.

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The deal signals a reset in US-India relations and comes as both countries seek to rebalance supply chains and strengthen economic partnerships amid shifting global trade dynamics.