India-US Trade Deal 2026: Tariffs Cut to 18%
Why in the news
India and the US concluded a trade pact in February 2026, announced jointly by Trump and India’s Prime Minister, ending a tense phase of trade friction.
Key facts
| Area | Outcome |
|---|---|
| Tariffs | 50% peak cut to 18%; rivals Vietnam, Bangladesh, Pakistan face 19-20% |
| Penalty | Additional 25% duty withdrawn |
| Energy | India to cut or halt Russian oil; buy US energy, possibly Venezuelan |
| Purchases | $500 billion over several years: energy, agriculture, coal, technology |
| Indian access | Phased cuts to duties and non-tariff barriers on US industrial goods |
| Safeguards | Dairy and staple crops excluded |
| Nuclear and tech | Under the SHANTI Act, 2025, more US access to civil nuclear sector and data-centre investment |
Background
- It aims to de-escalate the trade war that intensified in late 2025.
Exam angle
- 50% to 18%; 25% penalty removed; $500 billion; SHANTI Act, 2025.