Business & Economics
US-India Interim Trade Framework Cuts Punitive Tariffs
On 7 Feb 2026 Washington and New Delhi unveiled an ‘interim’ accord that rolls back Trump’s six-month-old 25 % levy on Indian imports to 18 %, conditioned on India curbing Russian-oil purchases and beginning reciprocal tariff cuts.
Focusing Facts
- Framework lowers U.S. tariff on Indian goods to 18 % from 25 %, effective upon formal signing.
- President Trump simultaneously revoked the separate 25 % tariff imposed on Indian goods in 2025 via executive order dated 7 Feb 2026.
- Trump says India will buy US products worth $500 billion over five years as part of the deal.
Context
Big-power economic pressure tied to strategic alignment has precedent: in 1973 the U.S. dangled Most-Favoured-Nation status to coax Moscow on Jewish emigration, and in 1998 it lifted India sanctions after Delhi signed the CTBT under similar quid-pro-quo. This 2026 rollback fits a long arc: the U.S. weaponises market access while emerging powers hedge between energy security (cheap Russian crude) and Western ties. India’s willingness to trade oil autonomy for tariff relief suggests the gravitational pull of the American consumer market—much as China embraced WTO entry in 2001 despite sovereignty qualms. Yet history warns that ‘interim’ pacts often stall (cf. 2019 U.S.–China Phase-One deal whose targets were never met). A century out, the episode may matter less for the tariff numbers than for the pattern: supply-chain blocs hardening along geopolitical lines, leaving middle powers like India constantly recalibrating between rival systems.
Perspectives
Indian ruling coalition and government officials quoted in the coverage
Indian ruling coalition and government officials quoted in the coverage — Present the interim trade deal as a mutually beneficial breakthrough that will open a giant U.S. market, create jobs and showcase Modi’s diplomatic skill. The celebratory tone serves the government’s electoral interests and therefore skips over concessions India made on reducing Russian oil purchases and on lowering farm tariffs that could hurt domestic producers.
Indian opposition parties featured in the reports
Indian opposition parties featured in the reports — Warn that the agreement tilts heavily toward Washington and risks harming sensitive agricultural sectors and farmers’ livelihoods. As political rivals, they have an incentive to accentuate any downside to undercut Modi, so they gloss over potential export gains and broader strategic benefits cited by economists.
U.S. Trump administration perspective embedded in the articles
U.S. Trump administration perspective embedded in the articles — Portrays the tariff cuts as a strategic reward for India’s promise to curb Russian oil imports, demonstrating Washington’s leverage in pressuring Moscow over Ukraine. Framing the policy primarily as geopolitical leverage downplays the economic whiplash of routinely raising and then lowering tariffs and overlooks the cost to U.S. consumers and businesses during the tariff period.