Business & Economics
US–India Interim Pact Slashes Tariffs to 18 %, Ties Relief to Russian-Oil Exit
On 7 Feb 2026 Washington and New Delhi unveiled an “Interim Agreement” that immediately cut the US reciprocal tariff on Indian goods from 50 % to 18 % and revoked an extra 25 % oil-related penalty, in exchange for India’s pledge to halt Russian crude purchases and buy more US exports.
Focusing Facts
- Executive Order 14346 (5 Feb 2026) lists 50→18 % tariff reduction and suspension of the 25 % surcharge, covering textiles, leather, chemicals, and machinery.
- India formally declared plans to import US goods worth $500 billion over 2026-2030—energy, aircraft, tech hardware, and precious metals foremost.
- Deal leaves Indian barriers on U.S. farm, dairy, meat, and grain products untouched, while U.S. grants zero duty on Indian spices, tea, coffee, and gems.
Context
This bargain echoes the 2005 U.S.–India Civil Nuclear Agreement—another narrow, interim accord that preceded a broader strategic shift—yet differs in tying trade carrots to an explicit energy-security demand reminiscent of the 1941 U.S. oil embargo on Japan. Structurally, it signals two longer arcs: the century-long American practice of using tariff leverage (Smoot-Hawley 1930; Section 232, 2018) and the post-1991 Indian move from autarky toward selective openness, now calibrated to protect politically powerful farm lobbies. On a 100-year horizon the move matters less for immediate dollar figures than for what it codifies: the U.S. replacing China with India in critical supply chains and using market access to police third-party energy ties. If India indeed weans off Russian crude, the pact could realign Eurasian energy flows; if it quietly backtracks, the reprise of punitive tariffs would underscore the limits of economic statecraft—much as the 1973 Arab Oil Embargo exposed the fragility of coercive trade tools.
Perspectives
Pro-government Indian business media
NewsX, Business Standard, Hindustan Times, SocialNews.XYZ — Present the interim US-India trade framework as a landmark win that slashes tariffs, safeguards farmers and MSMEs, and unlocks a $30-trillion U.S. market for Indian exports. Echoes official talking points from Commerce Minister Piyush Goyal and may under-play concessions India makes, reflecting an interest in promoting the government’s economic narrative.
Indian outlets stressing U.S. leverage on Russian oil
Asianet News Network, LatestLY — Highlight that tariff relief is explicitly tied to India’s pledge to halt Russian oil imports, suggesting the trade deal carries strategic strings attached. By foregrounding the Russia clause they cast the agreement as U.S. pressure on India, which can stoke nationalist concerns and may over-state how firmly New Delhi’s energy policy is constrained.
Crypto-focused financial press
CoinGape — Frames the tariff rollback as a bullish macro catalyst, claiming the deal has already sparked a rebound and potential rally in crypto prices. Links an unrelated geopolitical trade story to crypto market movements to generate upbeat sentiment and traffic, relying on speculative logic more than hard evidence.