India-US Tariff Deal Decoded: Who Really Won? The Numbers Behind the Headlines

On February 2, 2026, US President Donald Trump announced a "trade deal" with India. According to CNBC, Trump claimed India agreed to stop buying Russian oil, purchase $500 billion worth of American goods, and reduce all tariffs to zero. In exchange, the US would lower its tariff on Indian goods from 50% to 18%.

Hours later, Prime Minister Narendra Modi responded. His statement, as reported by Al Jazeera, was notably different: "Made in India products will now have a reduced tariff of 18%." That was it. No mention of $500 billion. No mention of stopping Russian oil. No mention of zero tariffs.

The asymmetry in messaging tells the story. Trump's announcement ran 218 words and was designed for American audiences to see a "win." Modi's 98-word response committed to almost nothing, preserving maximum flexibility for future negotiations.

Let's look at what tariffs each country charged before Trump, during the trade war, and after this "deal."

According to WTO data, India's average Most Favored Nation (MFN) tariff was 17% — the highest among major economies. The US charged Indian goods just 2-3% on average before 2025.

Here's the key insight: India moved from 13.5% to 0%. The US moved from 50% to 18%. India gave up all tariff revenue. The US still collects 18% — which is 6 times higher than what it charged before Trump started the trade war.

According to Business Standard, India's new 18% rate is lower than most Asian competitors:

The marginal advantage over Vietnam and Bangladesh (2 percentage points) is real but modest. The significant gap is with China, which faces rates nearly double India's.

Trump claimed India will buy $500 billion worth of American goods. Let's examine whether this is even possible.

According to India's official budget documents, the Union Budget 2026-27 allocates total expenditure of approximately ₹53.5 lakh crore — roughly $620 billion.

According to analysts quoted by Business Standard:

• If $500B is a one-time commitment: It equals 81% of India's entire annual government spending
• If spread over 5 years: $100B/year — 2.4x current US exports to India
• If spread over 10 years: $50B/year — still higher than current total
• As share of all imports: $500B would be 66-71% of everything India imports from everywhere

Bloomberg reported that Indian officials clarified the $500B figure includes "existing pipeline of projects" — suggesting it's not new spending but a repackaging of ongoing commitments.

Trump's announcement claimed India agreed to "stop buying Russian oil." This is perhaps the most significant — and most questionable — part of the deal.

India is the world's third-largest oil consumer. According to Carnegie Endowment:

Russian oil comes at a significant discount. According to Carnegie's analysis, if India shifts away from Russian oil entirely, its annual oil import bill could rise by $9-11 billion. This cost would ultimately be passed to Indian consumers through higher fuel prices.

Nothing.

Modi's statement, as reported across multiple outlets including Al Jazeera and CNN, made no mention of Russian oil whatsoever. The commitment appears to be entirely from Trump's side of the conversation.

Here's context that makes the "stop Russian oil" claim even more puzzling.

On December 4-5, 2025 — just two months before this deal — Russian President Vladimir Putin visited India. According to Chatham House and PBS:

The S-400 system is particularly significant. According to The Week, during the May 2025 India-Pakistan conflict, deployed S-400 squadrons "intercepted over 160 targets including drones and ballistic missiles." India's defense relationship with Russia is not merely economic — it's existential.

Just one week before the US announcement, India signed a comprehensive Free Trade Agreement with the European Union. The contrast is instructive.

According to Al Jazeera, the EU deal — which both sides called the "mother of all deals" — creates a combined market of nearly $27 trillion covering 2 billion people. Indian tariffs on 30% of EU goods fall to zero immediately, with 96.6% of tariffs eliminated or reduced over time. Crucially, the EU makes reciprocal concessions.

As CNBC noted: "The EU's deal is a genuine trade agreement, while Washington's, in keeping with the pattern of negotiations under President Trump, is a trade 'deal' — with all the flexibility and potential for reversal that implies."

This is not the first time the US has used tariff pressure to extract asymmetric concessions. The pattern is well-documented.

According to Peterson Institute research, in 1985 the US pressured Japan into the Plaza Accord, forcing the yen to appreciate by over 100% in three years. Japanese exports became uncompetitive. What followed was Japan's "Lost Decade" of economic stagnation.

The pattern: Create a crisis through punitive action. Offer "relief" that's worse than the original status quo. Extract asymmetric concessions. Declare victory domestically.

Perhaps the most significant issue: there is no deal to enforce.

As opposition MP Karti P. Chidambaram noted, according to Al Jazeera: "This is only a social media post, with no details available."

Carnegie Endowment concluded: "The deal won't magically restore US-India trust."

This deal must be understood in the context of India's foreign policy doctrine of "strategic autonomy" — maintaining relationships with competing powers without becoming subordinate to any.

According to Bloomberg, Prime Minister Modi has long had to balance ties with Russia and the US. That task became more challenging with Trump's pressure to stop Russian oil.

RUSI analysis notes that India is effectively hedging against the uncertainties of a fragmented global order by simultaneously engaging with the US-led West, a rising China, and traditional partner Russia — without becoming a subordinate ally to any.

The trade deal tests this doctrine. By giving the US zero-tariff access while receiving only partial relief, and by facing pressure on the Russia relationship, India's room for independent maneuvering has narrowed.