India to ramp up U.S. oil, defence and aircraft purchases; limited farm access under trade deal

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Last Updated: 3rd February 2026 - 03:06 pm

Summary:

India will increase purchases of U.S. petroleum, defence equipment and aircraft while offering limited access to parts of its agriculture market under a new trade agreement, according to Reuters. The deal cuts U.S. tariffs on Indian goods to 18% and includes commitments to expand bilateral trade across energy, manufacturing and technology sectors over the coming years.
 

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India has agreed to step up purchases of petroleum, defence goods and aircraft from the United States and open select segments of its agriculture market as part of a new trade agreement, according to Reuters, citing a government official.

The agreement follows months of trade negotiations between the two countries.

Purchase commitments

Under the deal, India will buy more American products across sectors including energy, defence, aircraft, telecommunications and pharmaceuticals.

U.S. President Donald Trump said purchases of American goods could rise to as much as $500 billion over time, covering energy, coal, technology, agricultural and other products.
The official said these commitments would be implemented over several years.

Market access changes

India has also offered market access for select agricultural products. The agriculture sector has traditionally been tightly protected.

The official added that India recently extended similar access to the European Union under a separate trade arrangement.

Tariffs on imported cars have also been reduced to address immediate U.S. demands.

Trade Data

Indian government data cited by Reuters showed exports to the U.S. rose 15.88% year-on-year to $85.5 billion between January and November, while imports stood at $46.08 billion during the same period.
The official told Reuters that a broader and more comprehensive trade pact between India and the United States will be negotiated in the coming months.

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