Economy February 9, 2026

India Agrees to Drop Digital Services Tax, Pledges Massive U.S. Purchases in Trade Deal

White House fact sheet says New Delhi will remove digital services tax, cut tariffs on U.S. industrial and agricultural goods and commit to roughly $500 billion in purchases

By Ajmal Hussain
India Agrees to Drop Digital Services Tax, Pledges Massive U.S. Purchases in Trade Deal

A White House fact sheet published Monday states that India has agreed to eliminate its digital services tax and to buy around $500 billion worth of American goods as part of a recent trade arrangement. The document also says India will reduce or remove tariffs on U.S. industrial products and a range of agricultural imports, negotiate new bilateral digital trade rules, and collaborate with the United States on further trade agreements in the weeks ahead. The fact sheet follows an earlier deal that lowered U.S. tariffs on Indian goods to 18% from 50%, and notes New Delhi's pledge to stop purchasing Russian oil while enabling greater U.S. imports.

Key Points

  • India has agreed to remove its digital services tax and to negotiate new bilateral digital trade rules with the United States - impacts the digital services and technology sectors.
  • New Delhi committed to buy around $500 billion in U.S. goods and to remove or reduce tariffs on all U.S. industrial goods and a range of agricultural imports - affects industrial exporters and agricultural markets.
  • The White House fact sheet follows a deal that cut U.S. tariffs on Indian goods to 18% from 50%; India also agreed to stop purchasing Russian oil and to enact measures to allow more U.S. imports - implications for energy and trade flows.

According to a White House fact sheet released Monday evening, India has agreed to remove its digital services tax and has committed to buy approximately $500 billion of goods from the United States under the terms of a recently announced trade deal.

The fact sheet outlines a set of mutually agreed measures, including the removal or reduction of tariffs on all U.S. industrial goods as well as a broad set of agricultural imports. It also says India will negotiate a new package of bilateral digital trade rules with the United States and will work with Washington to pursue additional trade agreements in the coming weeks.

Monday's publication comes roughly one week after the two countries signed a trade accord that reduced U.S. trade tariffs on Indian goods to 18% from 50%. As part of that earlier agreement, India agreed to stop purchasing oil from Russia and to enact measures facilitating increased imports from the United States.

The White House fact sheet repeats the commitment that New Delhi will remove its digital services tax and that both governments will engage on digital trade rules. It also reiterates the pledge by India to purchase more than $500 billion of U.S. goods, while noting tariff adjustments affecting industrial and agricultural categories.

Details on the timeline for implementation and the precise scope of tariff changes were not enumerated in the fact sheet beyond the broad commitments listed above. The document emphasizes forthcoming negotiations and collaboration between the two governments as they work to finalize the mechanisms for these commitments.


Context and immediate implications

The fact sheet frames the trade package as a set of concurrent commitments: India will remove a targeted levy on digital services, expand market access for U.S. industrial and agricultural products through tariff reductions, and make large-scale purchases of American goods. The bilateral work on digital trade rules and additional agreements is described as ongoing, with further negotiations anticipated in the weeks ahead.

While the fact sheet lists concrete actions - tariff cuts, the cessation of Russian oil purchases by India, and the large purchasing commitment - it also points to a sequence of follow-up steps to convert those commitments into detailed agreements and implementing measures.


For readers tracking sector impacts: the most directly affected areas identified in the fact sheet include digital services, U.S. industrial exporters, the agricultural sector, and energy markets to the extent oil procurement is involved.

Risks

  • Timing and detailed terms of future negotiations remain unspecified - the pace at which digital trade rules and tariff changes are implemented is uncertain, affecting businesses planning market access.
  • The fact sheet outlines broad commitments but does not list full implementation mechanics or schedules - exporters and importers in industrial and agricultural sectors face uncertainty about the practical details.
  • Commitments such as ceasing purchases of Russian oil and enabling increased U.S. imports depend on subsequent measures and legislation - energy and commodity markets may face uncertainty until those measures are finalized.

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