Trade deal agreed between India and America. (symbolic picture)
Jaiprakash Ranjan, New Delhi. The Trump administration, while removing the additional 25 percent tariff imposed on India, has maintained a clear threat that this duty will be reimposed if India resumes direct or indirect import of oil from Russia.
A new executive order issued by the White House on Friday said that the Commerce Minister, in conjunction with State, Treasury and other senior officials, will continuously monitor whether India resumes imports of oil from the Russian Federation. If this happens then the US President will have the right to impose tax on India again.
Both countries issued a joint statement
A few hours before the above order from the White House, both the countries have issued a joint statement on the trade deal agreed between India and America in the talks held between PM Narendra Modi and President Donald Trump on February 2.
Farmers do not need to fear American products
The gist of this statement is that Indian farmers producing traditional grains and dairy products have nothing to fear from American products because neither wheat-rice, nor milk-cheese, nor bananas or other fruits have been approved for import. Yes, the import of animal feed, American liquor, soybean oil and other fruits will increase rapidly because the Indian government will remove the obstacles in their path.
Trump announced the removal of tariffs
Along with this, President Trump has announced the removal of additional duty of 25 percent on India for purchasing oil from Russia. He has also claimed that India has promised not to buy petroleum products from Russia directly or indirectly. Commerce and Industry Minister Piyush Goyal termed this as a historic step and said that the doors of the world's largest economy will open for Indian exporters.
Prices of these things will decrease
It is clear from the statement that the prices of machinery, electronics, fruits, dry fruits, soybean oil, liquor etc. coming from America in India will decrease because now there will be no import duty on these. The Indian industries that will benefit the most are automobiles, aviation parts, generic medicines and gems and jewellery.
A tax of 18 percent will be imposed on imports of textiles, leather, shoes, rubber, chemicals and household goods in America, which is higher than the duty rate imposed before July 2025. But this rate is higher than India's other competing countries in Asia like Vietnam, China, Bangladesh etc., so Indian exporters are likely to benefit here too.
What was said in the interim agreement?
The interim agreement states, "The US will remove these additional duties on several important Indian products such as generic drugs, diamonds and aircraft parts. The US will also remove national security-related duties imposed on certain aircraft and aircraft parts coming from India. In return, India will get a special concessional quota in the US for automobile parts."
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 give Indian exporters better access to the US market of about $ 30 trillion. MSMEs, farmers, fishermen, women and youth will especially benefit from this. The increase in exports is expected to create millions of new employment opportunities." India will also get relief under Section 232 under American law.
open doors for animal feed
However, India has decided to open up the import of animal feed. There is ample availability of animal feed in America, whereas there is a shortage in India. This is expected to provide relief to the dairy and animal husbandry sector and reduce costs. Of particular importance is the import of grain (for animal feed) and red sorghum left after ethanol production.
The Economic Survey 2025-26 states that shortage of fodder is the biggest hurdle in the animal husbandry sector in India. Reports from several other agencies suggest that the number of livestock in India is increasing which may further increase the fodder shortage. Many surveys have revealed that 75 percent of cattle rearing families face shortage of fodder.
Imports from America to India will increase
However, India and the US will also deepen economic security, supply chain strengthening, and technical cooperation, especially to deal with unfair trade policies of third countries. Along with this, India has agreed to buy energy products, aircraft and their parts, precious metals, technical goods and coking coal worth $500 billion from America in the next five years.
This means that imports from America to India will increase more than double. Both the countries have also agreed to take technology business to new heights. Trade and cooperation will be increased, especially in GPUs and other advanced technology products used in data centers.
Shortly after the joint statement, an executive order was issued by the US President which is becoming effective on February 7, 2026. In this, the additional 25 percent additional duty imposed earlier on all goods imported from India in America has now been completely removed.
The government order to impose the said fee was issued in August, 2025. It has been made clear that now only the normal tariff or lower rate under the agreement will be applicable, not 50 percent charge like before. If India starts buying oil from Russia again, America may consider imposing it again, but for now it has been withdrawn.
Also read: America puts its hand on Pakistan's Achilles heel! PoK considered a part of India
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