InfoSAWIT, WASHINGTON — The administration of U.S. President Donald Trump has officially announced a strategic trade agreement with India, marking a significant reset in bilateral economic relations after a period of heightened tariff tensions.

According to Reuters, as cited by InfoSAWIT on Wednesday (February 4, 2026), the agreement centres on substantial tariff reductions and the easing of market barriers, although India will continue to protect certain sensitive agricultural sectors.

Under the deal, U.S. import tariffs on most Indian industrial goods will be sharply reduced to 18 percent from the previous 50 percent. The move also eliminates punitive tariffs previously imposed over India’s purchases of Russian oil.

In return, India agreed to lower or eliminate import duties on a range of U.S. industrial and consumer products, including tree nuts, grapes, alcoholic beverages, fruits, and vegetables—opening new opportunities for U.S. exporters in a market of more than one billion consumers.

However, India will maintain import protections for key domestic agricultural commodities such as rice, dairy products, sugar, and soybeans. Negotiations are ongoing to expand U.S. access to these sub-sectors, though not all demands were reflected in the initial agreement.

The deal also includes India’s commitment to gradually reduce crude oil imports from Russia and replace them with energy supplies from the U.S. and other countries, including Venezuela, reflecting a broader geopolitical realignment.

While detailed legal texts are still being finalised, analysts describe the agreement as a major breakthrough that ends a phase of tariff escalation while expanding U.S. market access in India. Market participants expect the deal to boost Indian exports to the U.S. and create fairer competition for agricultural and industrial products from both countries, despite lingering domestic protection concerns. (T2)