And there are linkages between the two FTAs.
For one, India-European Union (EU) FTA appears to have provided the momentum for the US to announce a deal with a country Trump once derided as a “dead economy”. By now, everyone knows that the India-US deal was actually sitting on Trump’s table for many weeks when India and the EU clinched the “mother of all deals”.
Perhaps it was the optics that finally nudged things along—the image of Prime Minister Narendra Modi flanked by European Commission President Ursula von der Leyen and European Council President Antonio Costa, all smiles, hands raised, and fingers interlocked in triumph.
On a more serious note, what the India–EU deal did was create some much-needed manoeuvring room for New Delhi. The agreement could never have been an antidote to the absence of a US deal—these are fundamentally different markets, and India trades meaningfully with both. One was never a substitute for the other.
But the pact did serve as a morale booster. It may also have stung Trump, giving him the sense that someone else—Europe, in this case—had stolen the moment by being first to announce a deal with the world’s fifth-largest economy.
The agreement with the US, however, is welcome. It cuts India’s tariff burden from 50% to 18%. Of the earlier levy, 25% was imposed over what the US called India’s “unfair trade” surplus, while the remaining 25% was linked to India’s purchase of discounted Russian oil. The first component has now been reduced to 18%, while the second has been dropped entirely, as according to Trump, India would stop buying Russian oil and instead source supplies from Venezuela. New Delhi has confirmed neither, but has said it is open to exploring all fuel options in light of market conditions and evolving geopolitical dynamics.
Some US products that will attract zero tariffs in India include red sorghum for animal feed, tree nuts such as pistachio, walnut and almond, and lentils. Vegetable planting material, vegetable sap, vegetable roots, taro, banana, beans, cereals, barley, and seeds are also among the commodities that will attract zero tariffs or reduced tariff rates for imports into India. Wine and spirits will be subject to a lower import tax rate.
India’s agricultural sector seems to have been protected from Trump’s consistent calls to open it up.
In commerce minister Piyush Goyal’s words, India is set to gain zero-duty access for goods worth around $44 billion, nearly half of its merchandise exports to the US, under the first phase of the agreement.
All said and done, it’s a mixed bag for India. While there is relief that a deal has been struck, New Delhi will have to accommodate Washington’s expectations on other fronts, such as buying oil from Venezuela rather than Russia. News reports show that India’s crude oil imports fell to a 38-month low of $2.7 billion in December 2025, with Russia’s share dropping to 24.9%—the lowest in three years. In volume terms, imports declined to 5.8 million tonnes, also the lowest level since February 2025.
And it’s not just Russia—India may have to manage Trump’s expectations on Iran, too.
There are widespread rumours that India may exit the Chabahar project after 26 April, when the conditional US sanctions waiver under the Iran Freedom and Counter-Proliferation Act, 2012, expires.
Unsure what the “good” means, but the fact that talks are underway is a positive development. Of course, Trump—being Trump—stepped up pressure on Iran on 6 February by signing an executive order imposing a 25% tariff on imports from any country that “directly or indirectly” buys goods from Iran, making good on a threat he had issued in January.
The talks between Iranian foreign minister Abbas Araqchi and US special envoy Steve Witkoff and Jared Kushner, Trump’s son-in-law, focus on Iran’s nuclear programme. The US would also like to include Tehran’s ballistic programme within its ambit, but for now, it’s only nuclear issues that are on the table.
The US has moved military assets into the region—Trump has referred to it as an “armada”. That appears to be the aircraft carrier Abraham Lincoln, accompanied by three warships equipped with Tomahawk missiles, according to the New York Times. The warships also carry air defences.
This comes at a time when Iran is at its weakest. It would be tempting for the US and Israel to see how much pressure a weakened Ayatollah Ali Khamenei regime can take right now. But that promises to destabilise the whole region, with major consequences. Recall West-engineered government collapses in Libya and Iraq.
Speaking of winds of change, Bangladesh heads to the polls on 12 February—a development worth close watching. A Bangladesh National Party (BNP) government is widely expected to take office.
One key takeaway from BNP leader Tarique Rahman’s meeting with India’s external affairs minister, S. Jaishankar, in January was the emphasis on continued engagement between India and Bangladesh, despite differences. Jaishankar was in Dhaka to attend the funeral of Rahman’s mother, former prime minister Khaleda Zia. The message was seen as positive, especially at a time when the interim government led by Nobel laureate Muhammad Yunus is perceived as leaning towards China and Pakistan.
Much will depend on whether the BNP secures enough seats to form a government on its own, without support from the Islamist Jamaat-e-Islami. Estimates suggest the BNP could win around 200 seats in the 300-member parliament, allowing it to govern independently. Even so, the party should expect protests, pressure, and criticism from the Jamaat.
Uncertainty also surrounds the outcome of the July charter referendum. The proposed Charter seeks to limit a prime minister’s tenure to two terms, introduce a bicameral parliament, and grant greater powers to the president. It remains unclear whether all political parties are aligned on these proposals.
For now, “wait and watch” appears to be the only sensible approach—along with crossed fingers.
Elizabeth Roche is an associate professor of practice at O.P. Jindal Global University, Haryana.
For more of her columns, read The International Angle.
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