Tue Feb 03 03:38:55 UTC 2026: ### India and U.S. Forge New Trade Agreement, Lowering Tariffs and Pledging Closer Economic Ties

The Story:
A new trade agreement between India and the United States was announced on February 2, 2026, following a phone conversation between Prime Minister Narendra Modi and U.S. President Donald Trump. The agreement includes a reduction in reciprocal tariffs on Indian goods from 25% to 18% by the U.S. President Trump has stated that this agreement is a result of friendship and respect for PM Modi. Indian officials, including External Affairs Minister S. Jaishankar and Union Home Minister Amit Shah, have lauded the deal as a boost to economic growth, job creation, and the “Make in India” initiative. However, Congress leader Jairam Ramesh suggested that President Trump holds some form of leverage over Prime Minister Modi, citing previous announcements made by Trump regarding Indian affairs. President Trump also announced that India will move forward to reduce “tariffs and non-tariff barriers” against the US to zero.

Key Points:

  • The U.S. will lower reciprocal tariffs on Indian goods from 25% to 18%.
  • The agreement was announced by President Donald Trump after a phone call with Prime Minister Narendra Modi.
  • Indian officials view the deal as beneficial for economic growth, job creation, and the “Make in India” initiative.
  • President Trump stated that India will reduce all tariffs and non-tariff barriers against the United States to zero
  • Congress leader Jairam Ramesh alleges potential leverage held by President Trump over Prime Minister Modi.

Critical Analysis:
There is no immediately actionable data to suggest deeper critical analysis of the situation.

Key Takeaways:

  • The India-U.S. trade agreement signifies a strengthening of economic ties between the two nations.
  • The tariff reduction is expected to benefit Indian exports to the U.S.
  • The agreement could face scrutiny and potential opposition, as suggested by Jairam Ramesh’s comments on potential leverage.
  • Trump’s statements that India will reduce all tariffs and barriers with the US to zero is likely to be a controversial point.
  • The agreement will impact domestic economies and is purported to create jobs.

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