Catenaa, February 08, 2026 – The United States and India have agreed on a framework for an interim trade deal, ending a prolonged trade dispute that had seen tariffs on Indian exports reach as high as 50 per cent. The agreement is a significant pivot in bilateral economic relations and sets the stage for deeper cooperation.
Under the terms, the U.S. will reduce its tariffs on Indian goods to 18 per cent, considerably lower than previous punitive rates. In return, India has agreed to eliminate or reduce tariffs on a wide range of U.S. industrial and agricultural products.
The deal’s contours were shaped by a broader diplomatic backdrop. New Delhi’s decision to halt Russian oil imports helped defuse tensions that had fuelled U.S. tariffs. President Donald Trump hailed the agreement as a step toward balanced trade and resilient supply chains.
For Indian exporters, the tariff reset opens fresh opportunities. The interim pact is expected to benefit sectors ranging from textiles and gems to engineering goods and chemicals, with markets previously constrained by prior duties now more accessible.
However, the framework is not without controversy. Farmers’ unions and political opponents in India argue the deal favours U.S. interests, warning that reduced protections for agricultural and food imports threaten rural livelihoods. Some have called for greater government accountability and transparency regarding the final terms.
Prime Minister Narendra Modi described the agreement as proof of growing global trust in India’s economy. He said it strengthens manufacturing and investment ties and expands global market access for Indian businesses.
While not a full bilateral trade agreement, the interim deal represents a meaningful reset. Markets are likely to watch how sector-specific concessions and regulatory changes unfold as both sides prepare for a comprehensive pact.
