After months of bickering over trade, tariffs and Russian oil, Washington and New Delhi finally announced reaching a framework for a trade agreement on 2 February 2026.
Trump imposing about 50 per cent tariffs on a chunk of Indian exports strained a relationship that required more than two decades of bipartisan nurturing. Additionally, certain Indian industries, especially textile, were particularly impacted by the high tariffs. It is only natural that certain stakeholder groups saw the deal announcement which brings down US tariffs to about 18 per cent with some degree of relief.
But what followed the initial announcement has only confounded experts and domestic interest groups. And the pattern unfolding the initial announcement is not unlike what occurred when Trump announced reaching framework deals with the UK, Europe and other entities last year.
My understanding is that Trump prefers to negotiate broad numbers first that he can announce, to be followed by ironing out granular details subsequently. This allows Trump to claim early victory but also makes the task of trade negotiators even more difficult as the initial announcement spikes the intensity of domestic feedback loops (think about level-2 game inspired from game theory).
As for “details”, first to enter the fray was US-India joint statement published on 6/7 February 2026 by both the US and Indian sides that did not have any mention of Russian oil despite Trump’s Truth Social post stating that the Indian prime minister had “agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela.”
Then came in the fact sheet and takeaways from the US and Indian sides on 9 February 2026. This is when developments and debate about the trade agreement became far more convoluted. The fact sheet noted India’s commitment to buy USD 500 billion worth of US products in five years and also had a mention of “certain pulses”. Interestingly, the joint statement had “India intends” instead of “India commits”. There was also no mention of “certain pulses” in the joint statement. Naturally, this caused some consternation in India, as importing pulses remains a sensitive issue and committing to buy USD 500 billion worth of US products does not square with India’s trade figures, GDP or current levels of imports from the US.
The USD 500 billion figure over five years seems too high to be realistic. However, such is the nature of trade negotiations with Trump that other economic players such as the European Union have agreed to similar incredibly high figures. In some ways, countries seem to be taking inspiration from Apple, which has been promising massive investments in the US since Trump’s first term but not following through with its plans thoroughly after announcements.
Further adding to the intrigue around the trade deal, the US revised the fact sheet, changing “commits” to “intends” and removing the reference to “certain pulses”.
There are five observations I have after a close reading of the joint statement of 6/7 February 2026, and the Indian and US statements on 9 February 2026.
First, the US fact sheet mentions the Russian oil question, while the Indian one stays silent on the same. Rubio, speaking at the Munich Security Conference recently, has stated that “In our conversations with India, we have gotten their commitment to stop buying additional Russian oil”, as reported by Mint. The Indian side has mostly been evasive on the Russian oil question. This The Hindu report aptly captures the Indian response:
Earlier, India had said that it would maintain multiple sources for crude oil purchases and diversify them to ensure stability in the supply chain, with national interests remaining the “guiding factor” for the procurement, Foreign Secretary Vikram Misri said this week.
It is unclear as to what India has exactly agreed to vis-a-vis Russian oil — complete pause on purchase of any Russian oil or only “additional” quantities? In either case, the fallouts and implications of the US dictating energy choices for a developing country that prizes its strategic autonomy for making energy security related decisions would be quite significant in the long-term.
Second, the Indian statement of 9 February says that “agricultural market access has been structured based on product sensitivity.” Now while my understanding of the agricultural sector and trade is somewhat limited, I couldn’t help but notice a peculiar line in the statement: “Immediate duty elimination has been offered only for select non-sensitive products that are already liberalised under other FTAs.” There doesn’t seem to be any clarity on what these non-sensitive products are. For what the government defines as sensitive sectors/products/items, there are some measures of protection that the trade deal establishes, according to the Indian version. I am not sure how this sits well with the following blanket announcement in the US version:
India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products, including dried distillers’ grains (DDGs), red sorghum, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products.
Third, on technology, there is some difference between the US and the Indian versions. Below is the US version which devotes less space to technology/digital aspect but underlines India’s commitment to reduce barriers to digital trade.
India committed to negotiate a robust set of bilateral digital trade rules that address discriminatory or burdensome practices and other barriers to digital trade.
India’s version has more content on technology/digital elements. But the language framing also indicates that India reserves the right to maintain “appropriate regulatory and national security safeguards”:
The partnership also enhances strategic technological cooperation between two major digital economies, supporting innovation while maintaining appropriate regulatory and national security safeguards.
Fourth, the following point in the joint statement underlines the likelihood of trade arrangement being renegotiated in future:
In the event of any changes to the agreed upon tariffs of either country, the United States and India agree that the other country may modify its commitments.
Fifth and finally, the much-celebrated relief to India’s textile sector evaporated within days of Trump’s initial announcement, as the US reached a deal with Bangladesh which could potentially mean that Dhaka’s textile exports to Washington may face significantly lesser tariffs (in specific conditions) as compared to what Indian exports would face even under the new trade arrangement.
India’s commerece minister has indicated that India’s textile exports would soon get the benefit of reduced tariffs similar to the arrangement Bangladesh has.
Answers to the Russian oil question and the fate of India’s textile and agricultural sector will only become clear as more details emerge of the still-being-negotiated trade deal in coming weeks and possibly even months. Until then, the current “convoluted state” would continue, with each side pushing out a different version of what has been settled.