In a major development for global trade, US President Donald Trump announced a new trade deal with India on Monday, saying Washington will reduce tariffs on Indian goods to 18% from higher levels following talks with Indian Prime Minister Narendra Modi. The reduction is part of a broader effort to ease months of trade tensions between the two largest democracies.
According to Trump&rsquo;s statement, the revised understanding also involves India lowering its tariffs and non-tariff barriers on American imports, potentially to zero, and committing to significantly expand purchases of US products across sectors, including energy, technology, agriculture and coal. He claimed India would import over $500 billion in US goods and energy and halt Russian oil purchases, decisions he linked to efforts aimed at addressing geopolitical conflicts.
India has publicly confirmed the tariff cut, with Prime Minister Modi welcoming the reduction after a direct phone call with Trump. In a social media post, Modi shared his appreciation for the move, saying Indian products will be more competitive in the US market under the new rate. While India has acknowledged the tariff relief, it has not explicitly confirmed all elements of the broader trade commitments mentioned by Trump, particularly on Russian oil and the scale of US imports.
<h3 dir="ltr">Key Elements of the Deal</h3>
<ul>
<li dir="ltr" style="font-family: georgia, palatino, serif; font-size: 12pt;" aria-level="1">Tariffs on Indian exports to the US were cut to 18%, easing previous trade pressure.</li>
<li dir="ltr" style="font-family: georgia, palatino, serif; font-size: 12pt;" aria-level="1">US rescinds an extra 25% punitive duty previously tied to India&rsquo;s Russian oil imports.</li>
<li dir="ltr" style="font-family: georgia, palatino, serif; font-size: 12pt;" aria-level="1">Trump claims India will reduce tariffs on US goods to zero (awaiting detailed confirmation).</li>
<li dir="ltr" style="font-family: georgia, palatino, serif; font-size: 12pt;" aria-level="1">Trump asserts India will buy $500 billion+ in US goods and energy (not officially confirmed by the Indian government).</li>
<li dir="ltr" style="font-family: georgia, palatino, serif; font-size: 12pt;" aria-level="1">Modi lauds partnership and future cooperation following the phone call.</li>
</ul>
This announcement follows nearly 12 months of complex negotiations marked by elevated US tariffs on Indian goods, including a punitive 25% levy related to energy imports. The tariff reduction is widely seen as a step toward improving economic ties and reducing trade imbalances, though full treaty text and detailed terms are yet to be published. Analysts say this deal could bolster trade flows and strengthen long-term cooperation between the two countries.

Trump announces tariff cut to 18%; India confirms lower duties after Modi phone call

US-India Trade Deal: Tariffs Cut to 18% After Talk

Trump announces tariff cut to 18%; India confirms lower duties after Modi phone call

February 3, 2026 | 12:09 IST