A major shift in India–US economic ties has been outlined following fresh trade discussions between the two countries, with energy, investment, and tariffs at the centre of the agreement.
The White House said India has committed to no longer purchasing Russian oil and will instead buy oil from the United States, with possible sourcing from Venezuela as well. The announcement was made by White House Press Secretary Karoline Leavitt on Tuesday, February 3, 2026.
“The President struck another great trade deal with India. He spoke with Prime Minister Modi directly. They share a very good relationship. India is committed to not only no longer purchasing Russian oil, but buying oil from the United States, also perhaps from Venezuela too, which we know will now have a direct benefit on the United States and the American people,” Ms. Leavitt told reporters.
She added that Narendra Modi has committed to $500 billion of investments into the United States. These investments will cover transportation, energy, and agricultural products. “So this is another great trade deal thanks to President Trump,” she said.
Ms. Leavitt earlier said in a television interview that the two leaders had a “great call” on Monday, February 2, 2026, after which the bilateral trade agreement was announced. She said, “They had a great call. It was very productive yesterday, and they struck a deal in which India has agreed to stop purchasing Russian oil to buy more American oil from the United States of America, and potentially from Venezuela too.”
She also stated that Donald Trump and his national security team are “now dictating” the commerce of Venezuela and its oil sales, adding that this move directly benefits the American people.
Under the new arrangement, US tariffs on India will be reduced to 18%, while American exports to India will face a tariff of 0%. Ms. Leavitt described this as a major win for American workers, businesses, and consumers.
Earlier, the Trump administration had imposed tariffs of up to 50% on India, including 25% linked to India’s purchase of Russian oil. In a social media post on February 2, 2026, Mr. Trump confirmed that US reciprocal tariffs on India would be cut from 25% to 18%, while India would reduce tariffs and non-tariff barriers against the US to “zero”.
Mr. Trump said the Prime Minister committed to “BUY AMERICAN” and to purchases exceeding $500 billion across US energy, technology, agriculture, coal, and other products.
Mr. Modi said it was wonderful to speak with his “dear friend” Mr. Trump. “Delighted that Made in India products will now have a reduced tariff of 18 per cent. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” he said.
He added, “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”
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