On February 3, 2026, India officially revealed a substantial trade agreement with the United States, which includes commitments to purchase up to $500 billion worth of U.S. goods. These purchases encompass key sectors such as energy, coal, technology, and defense, reflecting a significant shift in India's international trade policy amidst growing geopolitical tensions.
In addition to the agreements on U.S. arms and aircraft, India is also partially opening its agriculture sector. Speaking on the deal, U.S. President Donald Trump highlighted India's commitment to cease its purchases of Russian oil, which had previously strained U.S.-India relations.
The agreement marks a reconciliation between the two nations following months of trade tensions, particularly after Trump's administration imposed steep tariffs on Indian imports. The reduction of tariffs is expected to invigorate Indian exports to the U.S., which increased by 15.88% to $85.5 billion in January-November 2025, with imports from the U.S. at $46.08 billion.
Indian Economic Affairs Secretary Anuradha Thakur acknowledged that the trade deal has lifted investor sentiment, with the benchmark stock index, Nifty 50, noticeably rising. The lower tariffs are seen as an opportunity for Indian exporters to better integrate into U.S. supply chains.
Proposed U.S. goods targeted for purchase in India include pharmaceuticals, telecommunications equipment, and various defense products, alongside opening select agricultural sectors. Negotiations for a more comprehensive agreement are set to follow.
This agreement not only aims to enhance bilateral trade but also to solidify India’s position as a crucial partner in countering global challenges, including the influence of Russia and China in the Indo-Pacific region. The long-term implications of this deal on both countries' economies and diplomatic relations will be closely monitored in the coming months.

