India and U.S. Forge New Trade Agreement
The White House has announced a new trade agreement with India, highlighting commitments from India to cease purchasing Russian oil and instead increase oil purchases from the United States, potentially including Venezuela. White House Press Secretary Karoline Leavitt stated on Tuesday, February 3, 2026, that Prime Minister Narendra Modi has also pledged to direct $500 billion in investments into key sectors within the American economy.
Key Components of the Trade Agreement
According to the White House, Prime Minister Modi has committed to investments totaling $500 billion in the United States, targeting energy, transportation, and agricultural products. The agreement also includes India ending its purchase of Russian oil and instead buying oil from the United States and possibly Venezuela.
Statements from U.S. Officials
White House Press Secretary Karoline Leavitt said that President Trump and Prime Minister Modi share a very good relationship. Leavitt described the trade agreement as a significant achievement for the Trump administration, reflecting Washington's efforts to secure economic benefits from its major partners.
Tariff Reductions and Market Access
US Trade Representative Jamieson Greer mentioned that the agreement would retain some tariff measures while also opening Indian markets to certain sectors. While the U.S. will maintain some tariffs against India, India has agreed to lower trade barriers for American exporters in agriculture, manufactured goods, chemicals, and medical devices.
Reactions to the Agreement
Several Union Ministers have expressed their support for the India-U.S. trade agreement, calling it a win-win deal. External Affairs Minister Dr. S Jaishankar believes this agreement will lead to more jobs, growth, and innovation in both economies, strengthen the 'Make in India' initiative, and promote trusted technology ties. Home Minister Amit Shah said that the trade deal with a significantly reduced tariff will pave the way for stronger trade ties and mutual growth and will elevate the India-U.S. strategic partnership.
Impact on U.S.-India Relations
The new trade agreement signifies a positive turn in U.S.-India relations. It is expected to stimulate economic activity and re-energize sectors heavily dependent on exports to the U.S., such as textiles, auto components, and gems and jewelry.
Kremlin's Response
The Kremlin has stated that they have not received any information from India regarding plans to stop purchasing Russian oil.
Looking Ahead
While the trade deal presents a historic opportunity for India, it also poses challenges, particularly in managing its relationships with Russia and China.
Conclusion
The new trade agreement between the U.S. and India marks a significant step in strengthening bilateral relations. Key aspects include India's commitment to halt Russian oil purchases, a substantial investment pledge into the U.S. economy, and tariff adjustments to promote trade in key sectors.
