India–EU Deal Triggered Trump’s Trade Reset With India

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India-US Trade Deal Tracks Sharp Geopolitics Moves with China Calling the Shots

By TRH Op-Ed Desk

New Delhi, February 3, 2026 — Within a week of India and the EU signing a free trade deal, US President Donald Trump broke the news on Truth Social—tariffs on India slashed to 18 percent. With exemptions, Indian goods despite 50 percent tariffs had actually been facing a 35 percent tariff.

The verdict is split on “who came at the top” in the protracted brinkmanship. Geopolitics analyst Derek Grossman believes that “America came out on top.” His core thrust for US-tilted verdict is that “India will now stop buying Russian oil in place of Venezuelan crude.”

Scott Lincicome, an economist at the Cato Institute, holds a contrary view. He told CNN that “India has been slow-walking these trade talks for months, and the terms here are so vague that they could be anything from major to nothingburger.”

Analysts argued that the US still needs to pump billions of dollars to re-start the dilapidated oil wells of Venezuela. That may take years, and even a decade. And there are various routes to escape sanctions from buying Russian crude oil—sold at a discount of $16.

But Trump per analysts have ensured that Prime Minister Narendra Modi is now on board for his plans for the Venezuelan oils. To make Indian purchase of Russian oil zero, Trump will have to ensure that he gets 1.5 million barrel a day of the Venezuelan oil for India. The peak of Venezuelan crude was 3 million barrels a day. But 1999 changed the oil economy. US oil firms were banished. Oil fields became dilapidated. A damage of a quarter a century may take at least a decade of committed efforts from the oil czar of the US.

Thus, Russia-Venezuela oil stuff seems Trumpian rhetoric. India-US trades had also come unscathed despite tariffs. India still exported $95.5 billion worth of goods in the first 11 months of 2025 per the US Census Bureau. The US exported $42 billion worth of goods to India.

But India-EU trade deal, arguably, shifted gears in Washington. Trump’s contempt for Europe is now a new normal in geopolitics. That the EU gained access to Indian markets at much reduced rates possibly jilted Trump. India’s former Economic advisor Arvind Subramanian told CNN that “India-EU trade deal gave a domino’s effects.”

India’s exports to the US constitute just three percent of American imports. But Trumpian rhetorics lately again have sharpened an ant-China bravado—threatening Canada with 100 percent tariffs of Ottawa signed a trade deal with Beijing, et al.

That Trump believes India is a counterweight to China may sound too optimistic. But a beeline of middle powers to Beijing—from Canadian Prime Minister Mark Carney to UK PM Keir Starmer—must be inviting curiosity in the Oval Office. On January 31, Chinese President Xi Jinping wrote in Qiushi—the Communist Party’s flagship ideological journal—calling for the creation of a “powerful currency”: one that is widely used in global trade, investment, and foreign exchange markets, and that ultimately achieves reserve-currency status. That’s a challenge to dollar driven world order. Trump might have been counselled to salvage ties with India. He had his confidante Sergio Gor, the US ambassador to India, in New Delhi untying knots.