Six months after imposing a steep 50% tariff on Indian exports, the United States has rolled back its decision. On 2 February 2026, the Donald Trump administration announced that tariffs on Indian goods would be reduced to 18%.
The announcement came through a social media post by US President Donald Trump. It followed a phone conversation with Prime Minister Narendra Modi and came soon after India finalised a long-pending free trade agreement with the European Union.
But while both leaders acknowledged the tariff reduction, their public statements revealed stark differences in what they chose to highlight and what they left unsaid.
What Changed And What Did Not
Trump said the US had agreed to lower what he called a “reciprocal tariff” from 25% to 18%. However, it was unclear whether the additional 25% penalty tariffs imposed on India for importing Russian oil had also been removed.
That distinction matters because it was the combined effect of reciprocal tariffs and penalty tariffs that had taken the total to 50% last year.
Prime Minister Modi confirmed that tariffs on made-in-India products had been reduced to 18% and thanked Trump for the move. However, he did not mention reciprocal tariffs, penalty tariffs, or any specifics of a broader trade deal.
The Russia Oil Question
One of the most striking claims in Trump’s post was that Modi had agreed to stop buying Russian oil and instead purchase more energy from the United States and potentially Venezuela.
Indian authorities did not confirm this.
Neither the Prime Minister’s Office nor the Ministry of External Affairs issued any statement suggesting that India had committed to completely halting Russian oil imports.
This is not the first time such a claim has surfaced. In October 2025, Trump made a similar assertion, which was later contradicted by India’s foreign ministry spokesperson, who said he was unaware of any such promise.
India is the world’s third-largest importer and consumer of oil. Between 2022 and mid-2025, Russia was India’s biggest oil supplier, even as Western countries criticised New Delhi for continuing purchases during the Ukraine war.
Foreign Minister S Jaishankar has repeatedly argued that singling out India was unfair, pointing out that other countries were also importing Russian energy.
How Tariffs Became Pressure Tools
In 2025, Washington sharply escalated trade pressure on India.
First came a 25% reciprocal tariff. Then, in August, an additional 25% penalty tariff was imposed, explicitly linked to India’s Russian oil imports.
The impact was swift. Indian exports to the US reportedly fell by around 20% in a single month. Sectors such as textiles and gems were among the worst hit.
By December 2025, India’s imports of Russian oil had dropped to their lowest level in two years, which coincided with increased US pressure through tariffs.
A Trade Deal Without A Text
Trump described the tariff cut as part of a trade deal agreed “out of friendship and respect” for Modi. However, no document, framework, or formal announcement accompanied the claim.
This raised a basic question. What trade deal was he referring to?
In January 2025, India and the US had set an ambitious goal of increasing bilateral trade to $500 billion by 2030. At present, it stands at roughly $190 billion.
Tariffs have been one of the biggest obstacles to reaching that target.
Yet Modi’s response remained broad and diplomatic. He spoke of cooperation between two large democracies and the opportunities it could unlock, without confirming any concrete commitments on tariffs, non-tariff barriers, or timelines.
Zero Tariffs Or A Negotiating Position?
Trump also said India would “move forward to reduce their tariffs and non-tariff barriers against the United States, to zero”.
India has not confirmed this.
There has been no statement outlining which sectors would be affected, whether reductions would be phased, or when they might begin. Without official clarification, the claim appears to reflect a negotiating position rather than a concluded agreement.
Similarly, Trump’s assertion that Modi committed to buying over $500 billion worth of US energy, technology, agricultural and other products found no mention in Indian communications.
What India Has Said So Far
The Ministry of External Affairs did not release a detailed briefing.
Foreign Minister S Jaishankar welcomed the announcements and described them as a boost to jobs, growth and innovation in both economies. He emphasised stronger Make in India efforts and trusted technology ties, calling economic engagement the foundation of the strategic partnership.
But beyond broad reassurance, key questions remain unanswered.
Why This Still Matters
Even partial tariff relief improves India’s competitiveness, especially against China. It aligns with the China plus one strategy, where global companies diversify supply chains away from China, often choosing India as an alternative.
However, without clarity on penalty tariffs, oil commitments, or reciprocal market access, businesses are left navigating uncertainty.
For now, the tariff cut is real. The deal behind it is not.
