US President Donald Trump said on Monday that the United States and India have agreed to a trade deal that will significantly lower tariffs on Indian exports to the US. Following a phone call with Prime Minister Narendra Modi, Trump said the reciprocal tariff will be reduced to 18% from much higher previous levels.
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According to announcements from both sides, the US will charge a reduced reciprocal tariff of 18% on Indian goods, giving Indian exporters a competitive edge in the US market compared with regional peers such as Indonesia, Bangladesh and Vietnam.
The tariff cut reflects de-escalation after a period in which US tariffs on Indian goods surged. Previously, a combination of punitive measures linked to New Delhi’s Russian oil imports had pushed tariff levels significantly higher.
Trump Frames Deal as Driven by Friendship
President Trump shared the announcement via his social media platform following the call with Prime Minister Modi.
“Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%,” Trump wrote.
He also said India would move to address tariffs and non-tariff barriers on US goods, potentially bringing them to zero over time.
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Trump’s statement said India had agreed to stop buying Russian crude oil, and instead increase purchases of US energy and potentially Venezuelan oil as part of the overall commercial understanding.
While the US frames this as part of broader geopolitical aims, including pressure tied to the Russia–Ukraine war, India has not formally confirmed several of the specific commitments cited by Trump.
India’s Response and Trade Advantages
In response to the tariff cut, Prime Minister Narendra Modi posted his appreciation, saying Indian products will now benefit from reduced tariffs in the US market, a move welcomed by Indian exporters and investors.
The revised tariff structure also positions India favorably compared with other major exporters to the US, potentially strengthening ties and supporting economic growth amid heightened global competition.
