Mohan Sinha
09 Feb 2026

WASHINGTON, D.C./NEW DELHI: In two moves expected to significantly shape U.S.–India relations, President Donald Trump scrapped the additional 25 percent tariffs imposed on India for buying Russian oil, while officials from both countries unveiled a new framework to deepen trade and defense cooperation.

The White House said the penalties could return if India resumes large oil purchases from Russia. India has pledged to halt Russian oil imports and instead buy U.S. energy for the next decade.

As part of the pact, Washington will lower its "reciprocal" tariffs on many Indian goods to 18 percent from 25 percent, and remove duties on specific aircraft and aircraft parts.

India also signaled plans to buy about US$500 billion worth of American energy, aircraft, precious metals, technology products, and coking coal over the next five years. This shift sharply reduces U.S. tariff pressure compared with last year's levels.

The 18 percent tariff level also gives Indian exporters a slight edge in the U.S. market over competitors in the region who secured duties of around 19 percent to 20 percent, said Wendy Cutler, senior vice president at the Asia Society Policy Institute, this week.

Alongside this, the two countries reached an interim trade framework that advances negotiations toward a broader bilateral trade agreement. India agreed to cut or eliminate tariffs on a wide range of U.S. industrial, agricultural, and technology goods, and to ease import rules that have slowed access for American medical devices, food products, and digital equipment.

The United States will keep an 18 percent tariff on certain Indian exports, such as textiles, leather, plastics, chemicals, and machinery, but plans to lift duties on items like generic medicines, gems, and diamonds if the interim deal is finalized. Both sides also agreed to cooperate more closely on supply chains, technology trade, digital commerce rules, and investment screening.

India is expected to boost purchases of advanced technology, including data center equipment such as graphics processing units, as the two governments work to remove non-tariff barriers and expand market access. Overall, the deal aims to reset economic ties, strengthen supply chain security, and lay the groundwork for a long-term trade partnership.

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 (DDGs), red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.

India has agreed to address long-standing barriers to the trade in U.S. medical devices, eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions on, U.S. Information and Communication Technology (ICT) goods.

India will determine within six months of the Agreement's entry into force whether U.S.-developed or international standards, including testing requirements, are acceptable for U.S. exports entering the Indian market in the identified sectors.

The United States and India commit to addressing discriminatory or burdensome practices and other barriers to digital trade, and to establishing a clear pathway to robust, ambitious, and mutually beneficial digital trade rules as part of the BTA.

The agreement eases months of friction over India's oil trade and restores close political ties between Trump and Prime Minister Narendra Modi.

In a related move, the two countries are also pushing forward long-pending defence agreements that have been stalled for years. The first is India's planned purchase of six additional P-8I maritime surveillance and anti-submarine warfare aircraft made by the U.S. company Boeing, valued at $2.42 billion.

Defence sources said the Defence Acquisition Council, the Defence Ministry's top procurement body, is expected to review the purchase in the third week of this month, with the deal likely to be signed in the next fiscal year.