The Trump administration has removed the additional 25 percent tariff imposed on India, but has clearly threatened to reimpose the tariffs if India resumes importing oil directly or indirectly from Russia. A new executive order issued by the White House on Friday said the Commerce Secretary, in coordination with the State Department, Treasury and other senior officials, will continue to monitor whether India resumes imports of oil from the Russian Federation. If this happens, the US President will have the authority to reimpose tariffs on India.
Joint statement issued by both countries
Hours before the White House issued the above order, India and the US issued a joint statement regarding the trade deal agreed upon during talks between Prime Minister Narendra Modi and President Donald Trump on February 2.
Farmers do not need to fear American products
The gist of the statement is that Indian farmers, who traditionally grow grains and dairy products, have nothing to fear from American products as neither wheat and rice, nor milk and cheese, nor bananas or other fruits have been approved for import. However, imports of animal feed, American liquor, soybean oil and other fruits will increase rapidly as the Indian government removes barriers to their import.
Trump announced the removal of tariffs
President Trump also announced the removal of additional 25 percent tariff imposed on India for purchasing oil from Russia. He also claimed that India has promised not to buy petroleum products from Russia directly or indirectly. Commerce and Industry Minister Piyush Goyal called it a historic step, and said it would open the doors of the world’s largest economy to Indian exporters.
The prices of these things will reduce
It has been made clear in the statement that the prices of machinery, electronics, fruits, dry fruits, soybean oil, liquor etc. imported from America will reduce in India as there will be no import duty on them. Indian industries that will benefit the most include automobiles, aviation parts, generic drugs and gems and jewellery. Imports of textiles, leather, shoes, rubber, chemicals and household goods into the US will be taxed at 18 percent, which is higher than the tariff rate in effect before July 2025. However, this rate is higher than the tariffs imposed on India’s other competitors in Asia, such as Vietnam, China and Bangladesh, so Indian exporters are likely to benefit here too.
What was said in the interim agreement? “The US will remove these additional duties on several key Indian products, such as generic drugs, diamonds and jewellery, and aircraft parts. The US will also remove national security-related tariffs imposed on certain aircraft and aircraft parts coming from India. In return, India will receive a special preferential quota for automobile parts in the US,” the interim agreement said.
What did Piyush Goyal say?
Commerce Minister Piyush Goyal said, “Under the decisive leadership of Prime Minister Narendra Modi, India has created this framework with the US, which will provide Indian exporters better access to the approximately $30 trillion US market. MSMEs, farmers, fishermen, women and youth will particularly benefit from this. The increase in exports is expected to create millions of new employment opportunities.” India will also get relief under Section 232 of the US law.
Doors open for import of animal feed
India has decided to open up the import of animal feed. America has ample supply of animal feed, whereas there is a persistent shortage in India. It is expected that this will provide relief to the dairy and livestock sector and reduce costs. Of particular importance is the import of grains (for animal feed) and red sorghum left after ethanol production.
The Economic Survey 2025-26 states that fodder shortage is the biggest constraint for India’s livestock sector. Reports from several other agencies show that the livestock population in India is increasing, which may further increase the fodder shortage. Many surveys have revealed that 75 percent of animal husbandry families face shortage of fodder.
Imports from America to India will increase
Meanwhile, India and the US will also deepen economic security, supply chain strengthening, and technological cooperation, especially to counter unfair trade practices by third countries. India has also agreed to buy energy products, aircraft and parts, precious metals, technology goods and coking coal worth $500 billion from the US in the next five years.
This means that imports from America to India will more than double. Both the countries have also agreed to take technology trade to new heights. Trade and cooperation will be expanded, especially in GPUs and other advanced technology products used in data centers.
Executive order issued
Soon after the joint statement, an executive order was issued by the US President, which will be effective from February 7, 2026. The order completely removes the additional 25 percent tariff previously imposed on all goods imported from India into the US.
The government order imposing the said tariffs was issued in August 2025. It has been made clear that now only normal tariff or lower rate under the agreement will be applicable and not 50 percent tariff as before. If India resumes buying oil from Russia, the US may consider reimposing tariffs, but that has been put off for now.
