In a major development for India-US relations, United States President Donald Trump and Prime Minister Narendra Modi have announced a breakthrough trade agreement this week. After months of tension over tariffs and India’s oil purchases, the two nations have agreed to a “truce” that lowers taxes on Indian goods entering the US.
However, the news comes with a mix of updates for Indians. While businesses are cheering the tariff cuts, immigration policies are getting stricter, with a special flight deporting over 200 Indian nationals back to Punjab and Haryana just yesterday.
Here is a simple, complete breakdown of what happened, how the new trade deal affects India, and the latest updates on H-1B visas.
The Big Trade Deal: What Has Changed?
On Monday, February 2, 2026, President Trump announced on social media that the US is cutting “reciprocal tariffs” on Indian imports.
Key Highlights of the Deal:
- Tariff Reduction: The tax (tariff) on Indian goods sold in the US has been reduced from roughly 50% down to 18%. This is a huge relief for Indian exporters who were facing high costs.
- Punitive Duties Scrapped: Last year, the US imposed an extra 25% penalty tax because India was buying oil from Russia. President Trump confirmed this penalty will now be removed.
- India’s Promise: In return, India has agreed to lower its own tariffs on American goods to “zero” and buy more US products.
- The $500 Billion Commitment: Reports state that India has committed to purchasing over $500 billion worth of American energy (oil/gas), technology, and coal in the coming years.
Commerce Minister Piyush Goyal confirmed that the deal is in the “final stages” and will be signed shortly.
Read more: JPSC Civil Services 2026
The Controversy: Russian Oil vs. American Oil
The most talked-about part of this deal is the condition regarding Russia. President Trump claimed that PM Modi agreed to stop buying oil from Russia and instead buy from the USA and potentially Venezuela.
Is this true? While the US side claims India has agreed to stop Russian oil imports, the Indian government has not officially used the words “stop” or “ban” yet. Indian officials have only said they will “buy more” from the US. This remains a tricky diplomatic point because India has relied on discounted Russian oil for its energy needs for the last few years.
Impact on Indian Business and Jobs
This deal is expected to be a major booster for Indian industries that export to America. When taxes go down, Indian products become cheaper for American buyers, leading to more orders.
Who benefits the most?
- Textiles & Apparel: Clothes made in India will be more competitive against Vietnam and Bangladesh.
- Gems & Jewellery: A massive export sector that employs lakhs of workers.
- Auto Components & Engineering: These sectors were struggling under the 50% tax and will now see relief.
Important Immigration Updates (H-1B & Deportations)
While trade relations are improving, the US administration is strict on immigration. Two major updates came this week that every Indian planning to go to the USA must know.
1. 205 Indians Deported
On Wednesday, February 4, 2026, a US military chartered plane landed in India carrying 205 Indian nationals who were deported (sent back). These individuals had entered the US illegally without valid visas. Sources say this is part of a stricter “mass deportation” policy by the US government to crack down on illegal entry.
2. H-1B Visa 2027 Registration Dates Announced
If you are an IT professional or student planning to work in the US, the official dates for the next H-1B visa season are out.
- Registration Opens: March 4, 2026 (Noon ET)
- Registration Closes: March 19, 2026 (Noon ET)
- Lottery Results: Expected by March 31, 2026.
Note: The US Citizenship and Immigration Services (USCIS) will use a “beneficiary-centric” selection process again to prevent fraud.
What Happens Next?
In the coming days, watch for the official signing of the trade document between India and the US. Experts will also be watching closely to see if India actually stops buying Russian oil or if it continues to balance ties between Russia and the West.
For now, the stock market has reacted positively, and Indian exporters are breathing a sigh of relief.
Frequently Asked Questions (FAQs)
Q1: Did India agree to stop buying Russian oil?
President Trump claims India agreed to stop, but the Indian government has not officially confirmed a total ban yet. They have only agreed to buy more oil from the US.
Q2: How much is the new tax on Indian goods?
The tariff has been reduced to 18%. Previously, it was as high as 50% due to penalties.
Q3: When does the H-1B registration start for 2027?
The registration period opens on March 4, 2026, and closes on March 19, 2026.
Q4: Why were 205 Indians sent back from the USA?
They were deported because they had entered the USA illegally (without proper visas or documents).
Q5: Will this trade deal make iPhones or US laptops cheaper in India?
Possibly. If India reduces its import duties on US technology to “zero” as promised in the deal, prices for American gadgets could drop.