According to CCTV News, U.S. President Donald Trump posted on his social-media platform Truth Social on 2 February that he had spoken with Indian Prime Minister Narendra Modi and reached a U.S.-India trade agreement.

       According to Trump, the United States has reduced the "reciprocal tariff" rate on India from 25% to 18%, effective immediately. In corresponding moves, India has made the following commitments:

• India agreed to cut tariffs and non-tariff barriers on U.S. products, with the goal of reducing them to zero;

• India agreed to stop purchasing Russian oil and instead buy more oil from the United States, with potential future purchases of Venezuelan oil as well;

India agreed to "buy American" at higher levels and committed to purchasing over $500 billion worth of energy, technology, agricultural, and coal products from the United States.

       Subsequently, Indian Prime Minister Modi also confirmed on social media that tariffs on Indian-made goods exported to the U.S. have been reduced to 18%.

       As background, trade friction between the U.S. and India escalated in late July last year when Trump announced 25% tariffs on Indian imports (Related: Tariff Shock! Another Wave of New Tariffs Announced on the Same Day: 50%, 25%, 15%, Copper Tariffs). Just days later, on August 6, he announced an additional 25% tariff on all Indian goods due to India's purchase of Russian oil, bringing the total rate to 50% (Related: Latest! Trump Signs Order for Additional 25%! These Products Also Face 100%, 250% Tariffs!). However, Indian pharmaceuticals, which account for half of the U.S. generic drug market, and consumer electronics exports were exempted.

       The posts from both Trump and Modi also indicate that the 25% "Russian oil tariff" has been removed.

       It remains unclear how this agreement will be implemented. According to trade data provider Kpler, even after the 50% tariff took effect in August last year, India continued to import approximately 1.5 million barrels of Russian oil per day. Additionally, according to U.S. Commerce Department data, U.S. imports from India totaled $95.5 billion in the first 11 months of last year, accounting for 3% of total imports, while U.S. exports to India were slightly over $40 billion during the same period.

   Skepticism Abounds   

       Similar to U.S.-EU trade agreements, questions arose immediately after Trump's announcement, with critics arguing that given the scale of U.S.-India trade, the terms claimed by the U.S. president would be difficult to achieve.

       Pratik Dattani, founder of Indian think tank Bridge India, commented: "India only bought $41.5 billion worth of goods from the U.S. last year, so it's impossible to grow to $500 billion, especially since Trump is only talking about merchandise trade." Dattani also believes that despite reductions, India is unlikely to completely halt purchases of Russian oil. Nicolas Köhler-Suzuki, trade and economic security advisor at the French think tank Jacques Delors Institute, similarly believes that given India's approach to trade negotiations over the past two decades, Trump's claim that the country will reduce all tariffs "to zero" is highly unlikely, particularly in the agricultural sector