US and India end the era of cold relations

2026-02-04 10:33:00, Kosova & Bota CNA

The latest news from Washington can be seen all over India: the US and India have reached a historic trade deal. Just a short time after the agreement with the EU, the agreement between them is surprisingly quick, and perhaps not coincidentally.

The deal was announced in typical Trump fashion on the US President's Twitter account, "Truth Social." Donald Trump announced that the US would significantly reduce tariffs on Indian goods from 50 percent to 18 percent. A previously imposed punitive tariff of 25 percent would be eliminated entirely, according to White House sources.

The US imposed the tariff because India continued to buy cheap Russian oil and gas despite Western sanctions. An additional, general tariff will also be reduced from 25 percent to 18 percent.

Cold relations between the US and India

The relationship between Indian Prime Minister Narendra Modi and Trump was considered to have cooled significantly recently. The drastic US tariffs had strained relations and a deal seemed less likely. But there is no talk of a cold atmosphere in the American camp anymore.

Instead, the US ambassador, Sergio Gor, highlighted the personal closeness between the two leaders on India's NDTV news channel. "I have always said that the Prime Minister and the President share a close friendship. Some didn't believe it, but that friendship has grown over many years, has continued, and ultimately is why this agreement was reached," Gor said.

Import ban as leverage against Russia?

Friendship alone apparently does not explain the deal. As Trump stated, Modi had previously agreed to stop importing oil from Russia. US Ambassador Gore declined to comment on the details of the agreement. Suffice it to say that both sides have long agreed on the desire to end the war between Russia and Ukraine.

"The Prime Minister also wants to see peace there, as does the President," Gor emphasized. Therefore, the agreement reached now is a cause for celebration. Gor added: "To better understand, I want to remind you that it took the European Union and India 19 years to negotiate their agreement."

However, experts consider it unlikely that India would immediately stop all purchases of crude oil from Russia.

In a reaction on the "X" platform, Prime Minister Modi expressed his satisfaction with the tariff cuts. He has not yet commented on the data on the purchase of Russian oil. India's Commerce Minister, Piyush Goyal, stated that the agreement will create closer ties between the two economies and will create unprecedented opportunities for Indian companies.

According to US President Trump, India is committing to reducing import tariffs on American goods to zero and importing products worth $500 billion.

India is open

For financial market expert Arvind Sanger, the trade pact has long-term implications: "In recent years, India has been reluctant to take the risk of entering into free trade agreements. Just a few months ago, the country was barely present in many international trade agreements," he explains. Now India has opened up significantly more - "with the EU, with the UK and now again with the US. From a long-term perspective, this is of great importance."

Just over a week ago, the EU and India reached a broad agreement that eliminates tariffs on almost all goods. EU Commission President Ursula von der Leyen called it "the mother of all deals." /DW