India-US Trade Deal Slashes Tariffs, Boosting Economic Ties

ORF America Executive Director says agreement concludes period of high trade tensions

Published on Feb. 5, 2026

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A new trade agreement between India and the United States has significantly reduced tariffs, bringing relief to the economic landscape according to Dhruva Jaishankar, the Executive Director of ORF America. The deal, which includes the US lowering tariffs on Indian goods from 50% to 18%, is expected to benefit sectors like agriculture, technology, and manufacturing by lowering the cost of doing business between the two countries.

Why it matters

The trade agreement marks a major breakthrough in India-US economic relations, which had been strained by high tariffs and retaliatory duties in recent years. The reduction in tariffs is expected to increase trade volumes and encourage long-term investment between the world's two largest democracies.

The details

Under the terms of the deal, the US will reduce tariffs on Indian goods from 50% to 18%, while India has agreed to halt purchases of Russian oil and lower trade barriers. The specific mechanics of the agreement are still being finalized, but a joint statement outlining the implementation process is expected to be released this week.

  • The trade deal was announced by US President Donald Trump earlier this week.
  • The upcoming joint statement clarifying the implementation process is expected to be released this week.

The players

Dhruva Jaishankar

The Executive Director of ORF America, who provided commentary on the significance of the trade deal.

Donald Trump

The US President who announced the trade deal with India.

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What they’re saying

“It has brought a sense of relief to those who were concerned about the very high tariffs of 50 per cent that have been in place since September of last year and which now appear to go away.”

— Dhruva Jaishankar, Executive Director, ORF America

“We're still awaiting details on the sequencing and I think we should expect in the next few days a joint statement by the two governments that will outline next steps, including the technical details on how to proceed forward with this trade deal.”

— Dhruva Jaishankar, Executive Director, ORF America

What’s next

A joint statement by the US and Indian governments outlining the implementation details of the trade deal is expected to be released in the coming days.

The takeaway

The India-US trade deal represents a significant breakthrough in economic relations between the two countries, lowering tariffs and paving the way for increased trade and investment in key sectors like agriculture, technology, and manufacturing. The agreement is expected to stabilize markets and encourage long-term economic cooperation between the world's largest democracies.