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On February 2, 2026, a burst of reporting signaled a potentially meaningful shift in the U.S.–India commercial corridor: President Trump said the U.S. would reduce tariffs on Indian goods to 18%, tied to broader commitments that include India lowering barriers to U.S. products and (according to U.S. statements) curbing purchases of Russian oil.
This is not entirely unexpected as this author believed the current high Indian tariffs were unsustainable and essentially a negative cloud on foreign direct investment (I am a seer!). A real-world note. I have been involved in direct discussions over the past several months with a dozen Indian companies that want to enter the U.S. market (as well as U.S. companies looking to go to India) but paused their decision given the U.S. high tariff rates and uncertainty on the U.S. position on foreign direct investment (FDI). In terms of the U.S. position on FDI, the U.S. has always sought FDI-but with a lot of restrictions, with the biggest one being tariffs (see my previous article on this).
If you’re waiting for a signed, fully footnoted trade agreement before drawing conclusions, you’re thinking like a lawyer—not like an investor, a site selector, or a CEO trying to win market share (I can say this because I have been all 4!). In FDI, headline events like this can operate as “signal deals”. Even when the paperwork is incomplete, the direction of travel is enough to change boardroom behavior. It can shift internal posture from pause to pursue, start site searches, reopen factory-location models, and accelerate joint-venture conversations that were previously stuck in geopolitical fog.
Why incomplete details can still trigger real investment
FDI isn’t driven only by certainty; it’s driven by credible momentum. A tariff headline and a warmer diplomatic tone can do three concrete things immediately:
1) It compresses decision cycles.
When executives believe the policy environment is improving, they stop treating the U.S. as a “hard-mode market” and start treating it as a market where early action will be rewarded. That means: initiating U.S. entity formation, hiring a U.S. GM, engaging customs and trade counsel, and putting real estate options under LOI. None of that requires a final annex of HS codes to begin.
2) It changes the cost-of-delay equation.
For manufacturers and exporters, timing is everything. If tariffs are truly moving lower (and if a separate punitive layer is being removed), the difference between entering now versus entering after competitors shows up as customer lock-in, distributor exclusivity, and procurement “preferred supplier” status is granted to others can be a game changer.
3) It creates an “option value” for first movers.
Even if details evolve, early movers can structure decisions in phases—distribution, then light assembly, then deeper manufacturing—while maintaining flexibility. In practice, that optionality is a financial asset: it lets a company benefit under multiple plausible final outcomes.
The “first mover” play for Indian companies
For Indian companies considering U.S. expansion, the biggest opportunity isn’t simply tariff arithmetic. It’s the chance to become the default choice for U.S. customers and economic development organizations during a window when attention is high and competitors are still waiting for certainty.
A first mover approach looks like this:
- Start with a U.S. “beachhead footprint.” Secure warehousing, service capacity, and a credible U.S. business presence that shortens delivery times and improves customer confidence.
- Design for scale, not just compliance. Build traceability, supplier attestations, and audit readiness as part of day-one operations, so your U.S. customers see resilience—not risk.
- Lock in customers before you lock in capex. Run pilots, obtain reference accounts, and align your phased investment to signed demand. That’s how you avoid “build it and hope.”
- Words of wisdom. Don’t think you can enter the market without spending some time, money and resources. The U.S. is a massive market and one that requires “boots on the ground” and local representation. For more information on this, see my article about why it’s not a good idea to rely on a friend who opened a restaurant to open a tech company in the U.S.
And here’s the strategic truth that doesn’t get said enough: the first cohort of Indian firms that execute cleanly in the U.S. will shape the narrative for everyone behind them. Procurement teams will generalize from early experiences—good or bad. A few strong “first entrants” can create a halo effect that lowers perceived risk for Indian suppliers broadly; a few messy entrants can do the opposite.
Why this should also stimulate U.S. entry into India
The same signal cuts both ways. A credible move toward lower barriers—paired with public commitments to expand purchases—creates political and commercial cover for U.S. companies that have long wanted to scale in India but were wary of friction, unpredictability, or retaliation risk. A future article will talk about bureaucracy, non-transparent practices and, most importantly, patience. Multiple outlets reported very large purchase/market-opening claims (including a figure of $500B tied to U.S. goods), while also emphasizing that key details remain uncertain and some analysts are skeptical about feasibility at that magnitude.
For U.S. firms, the “India play” is often less about exporting from the U.S. and more about operationalizing India: local partnerships, local service and support, and in some cases local manufacturing to meet cost and customer expectations. In other words, a thaw in trade posture frequently becomes a thaw in two-way investment—because market-entry strategy follows the path of least policy resistance.
Don’t confuse uncertainty with inaction
Yes, the details are incomplete. Reuters noted that timelines and specific product commitments were not fully spelled out at announcement time. The Financial Times reported skepticism among analysts about whether some headline promises (like sweeping elimination of all barriers) are realistic across sensitive sectors.
But “not final” does not mean “not investable.”
The right response—especially for Indian companies that want a first mover advantage—is to invest in the no-regret foundations now:
- scenario modeling by product line and exposure
- site shortlists based on logistics and labor
- U.S. go-to-market partnerships and channel strategy
- compliance and traceability systems
- a phased capex plan tied to customer commitments
That’s how you move early without being reckless.
The real thesis: this is a corridor-opening moment
Even if the final structure looks different than today’s headlines, the market-relevant point is that the U.S.–India corridor appears to be re-entering a constructive, pro-commerce phase, at least directionally. That kind of signal tends to catalyze both board approvals and competitive urgency.
If you’re an Indian company: this can be a moment to get ahead of the wave—be the firm that establishes the template others follow.
If you’re a U.S. company: this can be a moment to treat India not as an “on paper” growth market, but as an operational growth market—one you can enter with a clearer policy wind at your back.
In FDI, the winners aren’t the ones who wait for perfect information. They’re the ones who build smart options early—and are ready to scale the moment the fine print lands.
About the Author
Gary Sumihiro is a global investment advisor and strategist. He is a board member of EDGE Partners and the founder of Sumihiro Investments. Mr. Sumihiro was previously appointed by the U.S. Secretary of Commerce to serve on the U.S. Investment Advisory Council and has spoken and judged at international investment forums. Mr. Sumihiro is also slated to judge and speak at the U.S. Department of Commerce’s SelectUSA Summit in Washington, D.C., in May 2026—an event bringing together global business leaders and government officials to shape the future of U.S. foreign investment strategy.For EDGE inquires, please emails us at gsumihiro@edgepartners.us