What Happened
- The White House revised the India-US trade deal factsheet, removing "pulses" from the list of products on which India would reduce tariffs, and changing the word "committed" to "intends" regarding India's $500 billion purchase pledge over five years.
- The US claimed India is reducing purchases of Russian oil, leading to the removal of a punitive 25% tariff, though this claim has not been confirmed by Indian officials.
- The revised factsheet clarified that protections will remain in place for India's agricultural sector, while India will eliminate tariffs on US industrial goods.
- India's tariff commitments now cover dried distillers' grains, red sorghum, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and additional products, but not pulses.
- The formal agreement is still being finalized, with the reciprocal tariff on Indian goods reduced from 25% to 18% effective February 7, 2026.
Static Topic Bridges
India-US Bilateral Trade Agreement (BTA) Framework
The India-US trade relationship has evolved from occasional friction to structured engagement. Bilateral goods trade exceeded $190 billion in 2024, making the US one of India's largest trading partners. The US has consistently highlighted India's high tariff barriers, averaging ~37% on agricultural goods and over 100% on certain automobiles. The current framework, building on the Bilateral Trade Agreement launched on February 13, 2025, aims to address these asymmetries through phased tariff reduction. Previous attempts at trade deals, including the Trade Policy Forum (established 2005), produced limited results.
- India-US Trade Policy Forum: Established 2005, ministerial-level
- Bilateral goods trade (2024): ~$190 billion
- US trade deficit with India: A persistent concern for US administrations
- India's average agricultural tariff: ~37%
- Current reciprocal tariff on Indian goods: Reduced from 25% to 18% (February 7, 2026)
- India's purchase intent: $500 billion in US products over 5 years (energy, aircraft, technology, coking coal)
Connection to this news: The ongoing revisions to the deal's terms reflect the complexity of negotiating across sectors with vastly different domestic political sensitivities, particularly agriculture, where India's protectionist stance collides with US demands for market access.
Pulse Production and Food Security in India
India is the world's largest producer, consumer, and importer of pulses. Pulses are critical for India's food and nutritional security, as they are the primary protein source for a predominantly vegetarian population. India produces approximately 25-27 million tonnes of pulses annually but faces a persistent shortfall of 3-5 million tonnes, necessitating imports. Key pulse-producing states include Madhya Pradesh, Rajasthan, Maharashtra, Uttar Pradesh, and Karnataka. The government maintains a minimum support price (MSP) for major pulses and has imposed stock limits and import restrictions during domestic price spikes.
- India's pulse production: ~25-27 million tonnes annually
- India's pulse consumption: ~28-30 million tonnes (persistent deficit)
- Major pulses: Tur (arhar), chana (gram), masoor (lentil), moong, urad
- National Food Security Act, 2013: Guarantees subsidized foodgrains to 75% of rural and 50% of urban population
- MSP mechanism: Government sets floor price for 23 crops including major pulses
Connection to this news: The removal of pulses from the trade deal factsheet suggests India successfully resisted pressure to liberalize this politically sensitive sector, given the livelihood implications for millions of small farmers and the food security dimensions of pulse pricing.
India's Energy Import Diversification and Russian Oil
India imports approximately 85% of its crude oil, making energy security a top foreign policy priority. Following the Russia-Ukraine conflict (2022), India significantly increased purchases of discounted Russian crude, with Russia's share rising from ~2% of India's oil imports before 2022 to over 35% by 2024. India's position has been that energy purchases are commercial decisions by oil companies based on availability, cost, and risk assessment. The India-US trade deal reportedly includes provisions related to India purchasing US energy products, including LNG and crude oil, as part of the $500 billion purchase intent.
- India's crude oil import dependence: ~85%
- Russia's share of India's oil imports: ~2% (pre-2022) to 35%+ (2024)
- India's top oil suppliers: Russia, Saudi Arabia, Iraq, UAE, US
- US LNG exports to India: Growing since first shipment in 2016
- India's energy basket: Oil (~30%), coal (~28%), biomass (~22%), natural gas (~6%), renewables (~14%)
Connection to this news: The trade deal's energy provisions and the US claim that India is reducing Russian oil purchases highlight the intersection of commercial energy decisions with geopolitical pressures, a tension India has navigated by framing energy imports as market-driven rather than strategically aligned.
WTO and Bilateral Trade Agreements
The World Trade Organization, established in 1995 (succeeding GATT, 1947), provides the multilateral framework for trade rules. However, the proliferation of bilateral and regional trade agreements has been a defining feature of 21st-century trade policy. India has Free Trade Agreements (FTAs) with ASEAN, South Korea, Japan, and several others, but notably lacks an FTA with the US or EU. The India-US trade deal operates outside the WTO's Most Favoured Nation (MFN) framework, using reciprocal tariff adjustments negotiated bilaterally. The US invoked IEEPA (International Emergency Economic Powers Act) rather than WTO-consistent mechanisms for its tariff actions.
- WTO: Established January 1, 1995; 164 member countries; HQ Geneva
- GATT: Predecessor to WTO, in effect 1948-1995
- MFN principle: Non-discriminatory tariff treatment among WTO members (Article I, GATT)
- India's FTAs: ASEAN, South Korea, Japan, Sri Lanka, Afghanistan, SAFTA, and others
- IEEPA: US domestic law (1977) used to impose trade restrictions under emergency powers
Connection to this news: The bilateral nature of the India-US trade deal, particularly the revision of terms and removal of specific commitments, illustrates the limitations of bilateral negotiations compared to multilateral frameworks with established dispute resolution mechanisms.
Key Facts & Data
- India-US reciprocal tariff: Reduced from 25% to 18% (effective February 7, 2026)
- India's purchase intent: $500 billion in US products over 5 years
- Pulses removed from the tariff reduction list in revised factsheet
- "Committed" changed to "intends" in purchase language
- India's crude oil import dependence: ~85%
- India's average agricultural tariff: ~37%
- Russia's share of India's oil imports: Rose from ~2% to 35%+ (2022-2024)
- Punitive 25% US tariff on India removed, effective rate now 18%