India has agreed to significantly scale up purchases of U.S. arms, defence systems, and commercial aircraft under a new trade deal announced on February 3, 2026. In return, the U.S. has slashed tariffs on Indian goods from 50% to 18%, boosting bilateral trade prospects and reshaping strategic defence cooperation.
India and the United States have finalized a sweeping trade deal that not only reduces tariffs but also deepens defence and aviation cooperation. The agreement, unveiled by President Donald Trump, marks a turning point in bilateral relations, with India committing to expanded purchases of U.S. petroleum, defence systems, and aircraft.
Notable Updates
Tariff reduction: U.S. tariffs on Indian goods cut to 18% from 50%.
Purchase commitments: India to buy defence equipment, arms, and commercial aircraft from U.S. manufacturers.
Trade volume: Potential to rise to $500 billion, covering energy, coal, technology, and agriculture.
Major Takeaways
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India will halt Russian oil imports, redirecting energy purchases toward the U.S. and Venezuela.
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Defence procurement includes advanced weapons systems and aircraft, strengthening India’s military modernization.
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The deal also opens limited agricultural market access, easing trade barriers.
Important Points
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Analysts view the agreement as a strategic win for both nations, balancing trade deficits and enhancing security ties.
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The aviation sector is expected to benefit from new aircraft acquisitions, supporting India’s expanding civil aviation market.
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The deal underscores India’s pivot toward Western defence partnerships amid global geopolitical shifts.
Sources: Economic Times