New Deal Between the US and India: Lower Tariffs in Exchange for Cutting Off Russian Oil? Why the Market Jumped Ahead on the US-India "Deal"

"The deal is done"—such strong words have swept across the globe. Mr. Trump of the United States announced on social media that he had "agreed" to a trade deal with India. The framework of the "deal" was outlined: the U.S. would reduce tariffs on Indian goods to 18%, while India would cease purchasing Russian crude oil, significantly lower tariffs and non-tariff barriers against the U.S., and make substantial purchases of American products[1].

The Reality Behind "50%→18%": Unraveling Accumulated Tariffs

The attention-grabbing aspect of this deal is the dramatic reduction from "50% to 18%." According to reports, the U.S. had imposed an additional punitive tariff of 25% on top of the existing reciprocal tariff of 25% as pressure on India for continuing to buy Russian crude oil. The total of 50% would be reduced to 18% by retracting the punitive portion[1].

On the other hand, the specifics of "when," "on which items," and "under what conditions" the 18% will be applied remain unclear at this point. It has been pointed out that the announcement is ahead of the institutionalization process (such as public notices)[1]. This has led to a dual response of "welcome and skepticism" spreading on social media.

India's "Commitment" is Huge: Over $500 Billion in U.S. Products?

Mr. Trump suggested that India would purchase "over $500 billion" in U.S. products, including a wide range of energy (such as coal), agricultural products, and technology[1]. He is also said to have stated that "tariffs and non-tariff barriers against the U.S. would be reduced to zero"[1].

The expression "zero" is striking. In real negotiations, precise planning is required for items, exceptions, and phased reductions. This is why there was a backlash and anxiety on social media, questioning "Is it really zero?" and "Will domestic industries and farmers be protected?"

The Market Reacts Positively, but "Many Blanks" Remain

Immediately after the announcement, Indian-related stocks and ETFs listed in the U.S. rose, and it was reported that investor sentiment shifted[1]. The expectation of reduced tariff burdens tends to be a tailwind for export companies. There were also follow-up reports of positive reactions in Indian market stock indices and currency[2].

However, in situations where the market runs ahead, there is a risk that reality may not catch up later. If the "deadline," "verification," and "measures in case of violation" of the deal remain unclear, there is a significant chance that expectations could turn into disappointment.

Geopolitics: Shifting from Russian Crude Oil Shakes Both "Economy" and "Diplomacy"

The core of this issue, which appears to be about trade, is actually deeply rooted in the context of energy and sanctions against Russia. India is one of the world's largest crude oil importers and has recently increased its share of cheaper Russian crude oil. The article suggests that while India's procurement is currently slowing, a complete halt may require a transition period[1][2].

Mr. Trump is said to have mentioned the possibility of Venezuelan oil as an alternative, in addition to American oil[1]. This "restructuring of supply sources" involves numerous practical issues, including oil prices, maritime transport, and the compatibility of refining facilities.

Social Media Reactions: Celebratory Mood and Debate Over "Reading the Numbers"

After the announcement, three major trends were observed on social media.

(1) Emphasis on "Achievement" by the Indian Government and Ruling Party
Prime Minister Narendra Modiwelcomed the reduction of tariffs on Indian products to 18% on X and expressed gratitude to the U.S.[3]. Ministers and ruling party leaders also spread support by describing the deal as a "historic advancement in India-U.S. relations" and a "tailwind for Made in India"[4][5].
This group's posts served to clearly convey the deal as a "diplomatic achievement" domestically.

(2) Media and Experts' Caution on "Interpretation of Numbers"
On the other hand, posts by journalists and experts questioned the definition of the numbers, asking "What is the total of the 18%?" and "Is it based on the assumption that the punitive portion will be removed?"[6].
Given the high immediacy of social media, numbers can easily take on a life of their own. Therefore, calm observations such as "Tariffs vary by item and system" and "'Agreement' and 'enforcement' are different things" gained sympathy.

(3) Opposition and Critics' Arguments on "Sovereignty" and "Accountability"
In India, criticism was reported, questioning "Why is the U.S. announcement coming first?" and demanding "Explain the content to the public"[7][8]. On social media, there was talk of discomfort with the "order of announcements" and the "weight of conditions" externally, and concerns grew that opening the agricultural market would have a significant impact if true.
Rather than dampening the celebratory mood, the focus was on demanding accountability, asking to "show the content of the agreement," which could become a political flashpoint in the future.

What Will Be the "Next Focus"?

The future focus is simple.

• Timing and Legal Procedures for Implementation: When and in what form will the tariff rate changes be finalized?[1]

• Conditions for Halting Russian Crude Oil: Will it be immediate or phased, and how will violations be handled?[2]

• Materialization of the "Zero Barriers" Statement: Are there target items, exceptions, and safeguards for domestic industries?[1][7]

• Feasibility of Purchase Commitment: Is over $500 billion a "goal" or a "contract"?[1][2]

The excitement on social media was divided between words celebrating achievements and questions doubting the conditions. The market has priced in expectations, politics demands explanations, and practical matters require attention to detail—whether these three can align simultaneously will determine the success of this deal.
How far the statement "agreed" will translate into actual systems and logistics is now the focus, shifting to "paperwork and procedures" in the future.

References

[1] Primary report on the agreement details (tariffs 50%→18%, demand to halt Russian crude oil, lack of specifics, U.S. procedures incomplete, market reactions, etc.)
URL: https://www.investing.com/news/world-news/trump-says-agreed-on-trade-deal-with-india-4479564

[2] Economic and market supplements as follow-up (impact of tariff reductions, India's purchase targets, implications of transition period, etc.)
URL: https://www.reuters.com/world/india/india-us-trade-deal-slashes-tariffs-lifts-exports-markets-2026-02-03/

[3] Prime Minister Modi's X post (welcoming and expressing gratitude for the 18% tariff)
URL: https://x.com/narendramodi/status/2018377090840830101

[4] Example of reaction from key figures in India's ruling party (emphasizing the agreement as an achievement)
URL: https://x.com/AmitShah/status/2018398313301828068

[5] Example of reaction from Indian government officials (mentioning the agreement as a historic advancement)
URL: https://x.com/rajnathsingh/status/2018412165854863783

[6] Expert commentary on interpretation of numbers and conditions (comments on the significance of 18%)
URL: https://x.com/vikramchandra/status/2018371026397397133

[7] Domestic backlash and demand for explanation in India (criticism from opposition, skepticism about announcement precedence)
URL: https://www.ndtv.com/india-news/like-ceasefire-trade-deal-announced-by-trump-congress-slams-centre-on-india-us-trade-deal-donald-trump-pm-narendra-modi-10935919

[8] Another report on opposition criticism (demanding detailed explanation from the government)
URL: https://www.dawn.com/news/1970798/american-colony-indian-opposition-slams-modis-bjp-government-for-us-india-trade-deal