Trump Announces India-US Trade Deal, Cuts Tariffs to 18% After Call With PM Modi

The United States and India appear to have reached a major breakthrough in their trade relationship after US President Donald Trump announced a significant reduction in reciprocal tariffs following a direct conversation with Prime Minister Narendra Modi. The move, described by Trump as a gesture of “friendship and respect,” marks a notable easing of tensions that had strained economic ties between the two countries in recent months.

According to Trump, the United States will lower reciprocal tariffs on Indian goods from 25 per cent to 18 per cent with immediate effect. The announcement came shortly after the US President shared a post on his social media platform, Truth Social, indicating that he had spoken with PM Modi. The development was quickly welcomed by the Indian leadership, with Modi acknowledging that “Made in India” products would now face a substantially lower tariff in the American market.

The tariff rollback is being seen as an early outcome of broader negotiations around a long-pending India-US trade agreement. Talks between the two countries had faced repeated hurdles, particularly over India’s firm stance on protecting its agriculture sector from foreign competition. Trump, however, indicated that a comprehensive trade deal is now “on the cards,” suggesting that both sides have found common ground after prolonged discussions.

Adding another dimension to the announcement, officials in Washington confirmed that the US would also withdraw an additional 25 per cent tariff imposed earlier over India’s purchases of Russian oil. The decision follows assurances, according to the US administration, that India would significantly reduce its reliance on Russian energy imports. Trump claimed that PM Modi had agreed to divert oil purchases toward the United States and potentially Venezuela, framing the move as part of a broader effort to influence global energy flows amid the ongoing Russia-Ukraine conflict.

Before the formal announcement, Trump had posted an image featuring himself and PM Modi, sparking speculation about an imminent policy decision. The image was linked to a magazine cover highlighting both leaders, further fuelling anticipation in diplomatic and business circles. Soon after, confirmation came from US officials that the final tariff rate would be 18 per cent, subject to completion of technical procedures and paperwork.

Speaking after the announcement, US envoy to India Sergio Gor expressed optimism over the outcome, calling it a successful step forward in bilateral relations. He noted that while formalities remained, the agreed figure represented a decisive shift from earlier positions that had seen tariffs rise as high as 50 per cent during negotiations.

Trump also used the occasion to highlight what he described as broader economic commitments from India, claiming that New Delhi had agreed to substantially expand purchases of American energy, technology, agricultural products, coal, and other goods. He portrayed the agreement as evidence of a strong personal rapport between the two leaders and a shared willingness to deliver tangible results.

While official details of the full trade agreement are still awaited, the tariff reduction has already sent a strong signal to markets and policymakers. Analysts see the move as a reset in India-US trade ties, with potential long-term implications for supply chains, energy cooperation, and strategic alignment between the two democracies.