United States and India announce major trade agreement to lower tariffs and shift energy policy
A new trade agreement reported on February 3 2026 cuts United States tariffs on Indian goods to eighteen percent while India halts Russian oil purchases.
Insights:
On February 3, 2026, the United States 
USand India 
INannounced a landmark trade agreement that significantly reduces trade-policy uncertainty between the two nations. Under the terms of the deal, the United Stateswill slash its tariffs on goods from Indiafrom approximately 50 percent to 18 percent. In exchange, Indiahas agreed to halt all purchases of oil from Russia 
RUand lower various domestic trade barriers to international commerce.
USand India INannounced a landmark trade agreement that significantly reduces trade-policy uncertainty between the two nations. Under the terms of the deal, the United Stateswill slash its tariffs on goods from Indiafrom approximately 50 percent to 18 percent. In exchange, Indiahas agreed to halt all purchases of oil from Russia RUand lower various domestic trade barriers to international commerce.The announcement triggered immediate positive sentiment in the financial markets, with Indian equities and the rupee reported to be set for strong gains on Tuesday. Analysts and asset managers expect a significant relief rally at the domestic market open as investors respond to the improved export competitiveness. RADHIKA RAO radhika rao, a senior economist at DBS Group Holdings Ltd in Singapore 
SG, noted that the reduction in tariff levels addresses a major drag on sentiment observed over the past quarter.
SG, noted that the reduction in tariff levels addresses a major drag on sentiment observed over the past quarter.
