A Region on Two Tracks
US-India Trade Deal
A major shift in US–India economic relations unfolded this week with Washington and New Delhi reaching a long-awaited trade agreement that eases months of tariff tensions and resets the partnership for the coming decade. On 2 February 2026, US President Donald Trump announced a reduction in reciprocal tariffs on Indian exports from roughly 25 percent, and in some calculations up to 50 percent when punitive levies were included, to 18 percent across a broad range of goods. This came after intense negotiations and follows months of tariff escalations that had weighed heavily on Indian exporters.
Prime Minister Narendra Modi, while not officially confirming all elements of the agreement, publicly thanked Trump for the tariff cuts, calling the move a sign of “friendship and respect,” and emphasised the renewed confidence the deal brings to Indian industry and markets. Indian Commerce Minister Piyush Goyal clarified that the pact will benefit key export sectors, including engineering goods, textiles, leather and gems, with protections retained for sensitive sectors like agriculture and dairy to guard against sudden market shocks.
Financial markets responded positively: the Indian rupee posted its largest one-day gain in seven years, and benchmark indices such as the Nifty 50 rose sharply as investor sentiment improved on expectations of stronger export flows and tighter integration into global supply chains.
In essence, the US–India trade agreement represents a pragmatic reset after prolonged tariff friction. It bodes well for export competitiveness and economic cooperation, but its ultimate impact will hinge on implementation, sector coverage and how both partners balance economic openness with domestic sensitivities.
Insurgency Strikes Pakistan Again
Pakistan’s restive southwestern province of Balochistan was rocked by one of the most intense waves of militant violence in years between 29 January and 01 February 2026, as the outlawed Balochistan Liberation Army (BLA) launched coordinated gun, bomb and suicide attacks across dozens of districts. The assaults hit security posts, police stations, infrastructure and civilian areas in cities including Quetta, Gwadar, Mastung, Noshki and Dalbandin, killing scores of civilians and security personnel and prompting a sweeping counter-offensive by state forces. The BLA said it carried out “Operation Herof,” translated as “black storm,” describing the strikes as a calibrated blow against what it terms state repression and economic marginalisation.
The Pakistani government responded with an aggressive, multi-day crackdown. Security forces, including the army, Frontier Corps and counter-terrorism units, reported killing at least 145 militants over 48 hours in sustained operations following the attacks, one of the highest militant death tallies in recent memory in the province. Officials said troops had also tightened security around strategic corridors and key urban centres to prevent further incursions. Provincial Chief Minister Sarfraz Bugti vowed that authorities would “won’t surrender even for a second,” underscoring a hard-line posture against the insurgency.
Casualties on the government side were grave. Approximately 17 security personnel and over 31 civilians were killed in the initial assaults, prompting nationwide condemnation and a sense of urgency within Pakistan’s security establishment. Despite official allegations that some militants were “Indian-backed,” claims strongly denied by New Delhi, analysts stress that the violence is rooted in long-running ethnic and political grievances over autonomy, resource control and historic marginalisation in Balochistan, where separatist sentiment has simmered for decades.
Written by Sarthak Ahuja
February 5, 2026