Mon Feb 02 19:06:15 UTC 2026: # U.S. and India Reach Trade Agreement, Lowering Tariffs Amidst Controversy
The Story:
In a significant development, Prime Minister Narendra Modi announced that “Made in India” products will now attract a reduced tariff of 18% in the U.S., following a telephonic conversation with President Donald Trump on Monday, February 2, 2026. This move is intended to alleviate the impact of the 50% penalty tariffs imposed by Trump in August 2025. While both leaders have publicly expressed optimism about the trade deal, details remain unclear, and the Indian Ministry of External Affairs (MEA) has yet to respond to specific claims made by President Trump, including India ceasing Russian oil imports and a commitment to purchase $500 billion in U.S. products.
Key Points:
- President Trump and Prime Minister Modi announced a trade deal with reduced tariffs.
- U.S. tariffs on “Made in India” products are reduced from 25% to 18%.
- Trump claimed India agreed to reduce tariffs and non-tariff barriers to ZERO, stop buying Russian oil, and increase U.S. product purchases to $500 billion.
- The Indian MEA has not yet confirmed Trump’s specific claims.
- The Congress party has criticized Modi, suggesting he has “capitulated.”
- External Affairs Minister S. Jaishankar is in the U.S. for a Critical Minerals Ministerial meet, focused on supply chain resilience and reducing dependence on China.
Key Takeaways:
- The U.S. and India are attempting to improve strained bilateral relations through trade agreements.
- Discrepancies exist between the announcements of President Trump and the official statements from the Indian government, raising questions about the full scope of the agreement.
- The timing of the announcement, coinciding with the Critical Minerals Ministerial meet, suggests a strategic effort to strengthen cooperation in that sector and diversify supply chains away from China.
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