Daily News - Thursday, 5 February 2026
India-US defense trade crosses USD 20 Billion, US now 3rd‑largest supplier US share of India’s defense imports (Money Control)
India–US defense cooperation has reached a new milestone in 2026, with defense trade between the two nations crossing USD 20 billion (INR ~1.66 lakh crore), making the US India’s third‑largest arms supplier after Russia and France. The renewed U.S.–India Major Defense Partnership Framework (signed October 2025) expanded collaboration across land, sea, air, space, and cyberspace, and was guided by the Trump–Modi Joint Statement of February 13, 2025. A US Congressional delegation led by House Armed Services Committee Chairman Michael Rogers visited New Delhi in January 2026, meeting External Affairs Minister S. Jaishankar and officials to accelerate defense technology co‑production. India has agreed under the broader USD 500 billion (INR ~41.5 lakh crore) trade and investment commitment to purchase US defense goods, petroleum, electronics, and aircraft, addressing Washington’s trade deficit. The Ministry of External Affairs and the US Department of Defense highlighted that India’s imports of high‑tech US defense equipment (sensors, engines, missiles) have risen to 13% of total defense imports, up from just 3% in 2007–2012. Analysts note this shift reduces reliance on Russia and aligns India more closely with US supply chains, strengthening interoperability and strategic deterrence in the Indo‑Pacific.
United States has cut tariffs on Indian jewellery exports from 50% to 18%, this will make it easier for Indian companies to sell in America (Times Now)
On February 3, 2026, US President Donald Trump announced a sharp reduction in tariffs on Indian goods, cutting duties from 50% to 18%, which immediately boosted Indian jewellery stocks like Kalyan Jewellers (+6%) and Titan (+3.6%). According to the Commerce & Industry Ministry, India’s diamond exports to the US had fallen 58% year‑on‑year to USD 1.36 billion (INR ~11,300 crore) between April–November 2025, while overall jewellery exports dropped 44% to USD 3.55 billion (INR ~29,500 crore) even as gems and jewellery remained India’s fourth-largest export category to the US. The Gems and Jewellery Export Promotion Council (GJEPC), led by Executive Director Sabyasachi Ray, welcomed the tariff cut and urged for zero duty on polished diamonds, which could restore competitiveness for Surat’s diamond industry. Analysts at Bank of America estimate India’s effective tariff burden may now fall to 12–13%, down from 30–35% previously, offering major relief to labour‑intensive sectors. The industry employs nearly 1 million workers in the diamond sector, many of whom faced wage cuts during the downturn, though growth in lab‑grown diamonds helped cushion losses. Experts like Anil Talreja of Deloitte India believe the deal will stabilize supply chains linking Surat, Belgium, and US consumer markets, reviving demand and employment.
India turns to West Asia and Europe as US tariffs hit exports (CNBC TV18)
With the US imposing 50% tariffs on several labour‑intensive Indian exports, New Delhi is actively exploring West Asia and European markets to cushion the impact. Negotiations for a Free Trade Agreement (FTA) with the European Union (27 nations) are progressing, while talks with the European Free Trade Association (Switzerland, Norway, Iceland, Liechtenstein) are close to conclusion. India is also finalizing an FTA with Oman, expected within three months after Union Cabinet approval, alongside a Bilateral Investment Treaty with Saudi Arabia and exploratory talks with the Gulf Cooperation Council (GCC). Bilateral trade with Oman fell from USD 12.39 billion (INR ~1.03 lakh crore) in FY23 to USD 8.94 billion (INR ~74,000 crore) in FY24, with imports dropping sharply from USD 7.9 billion (INR ~65,000 crore) to USD 4.52 billion (INR ~37,000 crore), while exports rose to USD 4.42 billion (INR ~36,500 crore). The Indian government is pushing for guarantees on worker access in Oman, seeking to freeze the country’s “Omanisation” policy that prioritizes local hiring. Industry groups have opposed duty concessions for Oman’s petrochemical products, warning of a glut of low‑cost imports that could hurt India’s domestic sector.
India and the United States signed a USD 500 billion trade pact that shifts India’s oil imports away from Russia (Reuters)
India’s Commerce and Industry Minister Piyush Goyal announced that under the new India–US trade deal (Feb 2, 2026), tariffs on Indian goods entering the US will be cut from 50% to 18%, while India will gradually wind down Russian oil imports to diversify energy sources for its 1.4 billion citizens. The agreement, signed after talks between Prime Minister Narendra Modi and President Donald Trump, is part of a broader USD 500 billion (INR ~41.5 lakh crore) trade and investment framework covering defense, energy, and technology. The Kremlin, via spokesman Dmitry Peskov, downplayed the shift, noting Russia is not India’s only supplier, but Indian refiners will require a wind‑down period to complete existing contracts. Opposition leader Mallikarjun Kharge (Congress) criticized the deal, questioning whether India compromised by offering zero tariffs on US farm goods. Meanwhile, markets reacted positively, with sectors like jewellery and energy stocks rallying, though IT losses tempered gains. Officials from the Ministry of External Affairs confirmed a joint statement with the US Department of Defense and Commerce will be issued soon, highlighting strategic cooperation across energy, defense, and trade.
The Indian Union Budget 2026 has allocated USD 1.38 Billion for Assam and USD 8.7 Billion for underground railway projects in the Northeast (Business Today)
On February 4, 2026, Railway Minister Ashwini Vaishnaw announced a special plan to strengthen connectivity in the Siliguri Corridor, the 20–22 km stretch known as India’s “Chicken’s Neck” that links the Northeast to the rest of the country. The government has allocated USD 1.38 billion (INR 11,486 crore) in the Union Budget 2026 for Assam and the Northeastern states, with railway projects worth USD 8.7 billion (INR 72,468 crore) already underway. Vaishnaw confirmed that surveys for new bridges are being conducted and that underground rail lines are planned for the strategic 40 km section of the corridor. Assam Chief Minister Himanta Biswa Sarma welcomed the move, calling it a “major strategic breakthrough” that will reduce vulnerabilities and secure transport links. Sarma credited Prime Minister Narendra Modi and Vaishnaw for addressing an issue that should have been resolved decades ago, especially after the 1971 war. The project is seen as both an infrastructure upgrade and a national security measure, given the corridor’s proximity to Bangladesh, Bhutan, and China.
