The landmark February 2026 US-India trade accord, which slashes average tariffs from nearly 50% to 18%, marks far more than a routine market-opening deal. MARC EL-LAZIDI, chief investment officer at Jesmond Mizzi Financial Advisors Ltd, dissects New Delhi’s pledge to channel around $500 billion into US energy, technology and even coal over the next five years.
What caused the US-India trade fight and how does the deal fix it?
The tension began last summer when the US administration applied a 25% tax on Indian goods, which eventually doubled to 50% because India continued to buy Russian oil. The new agreement acts as a “reset button”. It lowers those taxes to a more manageable 18% and removes the extra penalties.
In exchange, India will buy significantly more American industrial equipment, farm products and high-end technology like the computer chips needed for AI. This move helps both countries secure their supply chains and reduces their reliance on competitors like China.
How does this deal speed up India’s economic growth?
India’s economy is already moving fast, growing at 6% to 7% every year. This deal adds fuel to that fire by providing cheaper American energy and coal to power India’s factories. Just as Spain successfully branched out into green energy and fashion, India is using this relief to become a global hub for manufacturing and medicine. With a massive young population and a steady currency, India is increasingly seen as a stable alternative for global business as the world looks for growth beyond traditional American and Chinese markets.
Where does India stand in the technology race between the US and China?
India is positioning itself as an independent tech leader. By using this deal to import the world’s best US-made chips (GPUs), India can build its own massive data centres and AI systems. While China focuses on state-backed, low-cost models, India’s private companies are aligning with premium technology from US leaders like Nvidia. This shift helps India build high-tech factories using advanced robotics, following a path similar to Japan’s successful use of automation to stay competitive.
How will this affect global money and politics?
The trade deal could influence the US Federal Reserve to keep interest rates in a range that supports growth, which might result in a slightly weaker US dollar. By shifting away from Russian oil, India is also making it harder for Moscow to fund its military efforts. This highlights a new era where India can lead within the BRICS group of nations without distancing itself from the West, creating a more balanced global power structure.
“With a massive young population and a steady currency, India is increasingly seen as a stable alternative for global business”
Which parts of the Indian economy are likely to see a boost?
The biggest winners are likely to be factories and shipping companies. The $500 billion commitment to buy US energy and airplanes will require a massive upgrade in India’s infrastructure. We expect to see more robots in factories, much like the automated systems used by Tesla, to help India make more goods at home.
Clean energy, aviation and technology hubs will also see significant activity, while the pharmaceutical and IT sectors benefit from easier access to international markets.
What does this mean for the global outlook?
From a global perspective, the US-India deal makes India a central piece of the world’s economic map. For those watching from Europe, India represents a unique growth story that is less affected by US debt challenges or by the policy opacity in China. India’s youthful workforce and its new role in global trade are creating a resilient alternative to the traditional economic powers.
As the world moves towards a more “multipolar” system in which power is shared among more countries, India is proving to be a cornerstone of that new stability.
This interview does not intend to constitute an offer or agreement to buy or sell investments or give investment advice, and the contents therein should not be construed as such. Investors should remember that past performance is no guide to future performance and that the value of investments may go down as well as up. The company is licensed to conduct investment services by the MFSA under the investment services act and is a member of the Malta Stock Exchange. The directors or related parties, including the company and their clients, are likely to have an interest in securities mentioned in this article. For more information, contact Jesmond Mizzi Financial Advisors Ltd of 67, Level 3, South Street, Valletta, on 2122 4410, or e-mail [email protected].
