In a landmark diplomatic development, President Donald Trump has declared the immediate implementation of a comprehensive trade agreement between the United States and India. The announcement came following a substantive phone discussion with Indian Prime Minister Narendra Modi on February 2, 2026.
The breakthrough agreement establishes reciprocal tariff reductions, with the United States committing to lower its tariffs on Indian goods from 25% to 18%. In a corresponding move, India has pledged to eliminate both tariff and non-tariff barriers against American imports, effectively reducing them to zero. This bilateral arrangement represents a significant departure from previous trade tensions between the two nations.
Beyond commercial considerations, the dialogue addressed critical geopolitical matters. Prime Minister Modi committed to substantial energy purchases from the United States, totaling over $500 billion across multiple sectors including technology, coal, and energy resources. In a strategic shift with global implications, India agreed to cease purchasing Russian oil and instead source petroleum products from the United States and potentially Venezuela.
President Trump characterized these energy agreements as instrumental to conflict resolution, stating that this collective approach ‘will help end the war in Ukraine, which is taking place right now, with thousands of people dying each and every week.’ Prime Minister Modi expressed gratitude on behalf of India’s 1.4 billion citizens, emphasizing the mutual benefits of strengthened Indo-American relations.
This agreement marks a significant realignment in global trade dynamics and energy markets, potentially altering existing geopolitical alliances and economic partnerships across multiple continents.









