Trump announces trade deal with India; reciprocal tariffs cut to 18%

The United States and India reportedly reached a major trade agreement that will see Washington reduce its reciprocal tariff on Indian goods from 25% to 18%, marking a significant easing of trade tensions between the two strategic partners.

The development was confirmed by US President Donald Trump in a post on Truth Social following a conversation with Indian Prime Minister Narendra Modi. According to the post, the two leaders discussed a range of issues, including trade, energy cooperation, and global geopolitical challenges.

“It was an Honor to speak with Prime Minister Modi of India this morning. He is one of my greatest friends and, a Powerful and Respected Leader of his Country… Out of friendship and respect… 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%. They will likewise move forward to reduce their Tariffs and Non-Tariff Barriers against the United States, to ZERO.”

As part of the broader understanding, Prime Minister Modi also agreed to significantly increase purchases of American goods, including energy, technology, agricultural products and coal, said Trump in his post. The US President claimed that India could import over $500 billion worth of US products under the expanded trade relationship. 

Soon after Donald Trump’s post, PM Narendra Modi took to X, and said, “Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.  When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.  President Trump’s leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace. I look forward to working closely with him to take our partnership to unprecedented heights.”

The Truth Social post also stated that India would stop buying Russian oil and instead source more energy from the United States and potentially Venezuela, a move President Trump linked to efforts to pressure Russia amid the ongoing war in Ukraine.

Calling Prime Minister Modi “a powerful and respected leader,” President Trump said the agreement would further strengthen the US–India relationship. He added that both leaders are focused on delivering results, signalling a new phase of economic and strategic cooperation between the two countries.

The trade deal is expected to have wide-ranging implications for bilateral commerce and could provide relief to exporters on both sides while reinforcing ties between the world’s largest democracies.