India–US Trade Deal Announced After Trump–Modi Call; Tariffs Cut to 18%
US President Donald Trump on Monday announced a new trade agreement with India, featuring lower reciprocal tariffs and expanded market access. Trump also claimed that New Delhi would halt purchases of Russian oil and significantly increase imports of American goods.
India has officially confirmed the tariff reduction, with Prime Minister Narendra Modi welcoming the move following a phone call between the two leaders. However, New Delhi has not publicly endorsed claims related to Russian oil imports or large-scale purchase commitments.
Union minister Ashwini Vaishnaw described the agreement as a “win-win” deal that would benefit industries and citizens in both countries.
Tariffs reduced after Trump–Modi conversation
Prime Minister Modi said Indian exports to the US will now face a reduced tariff of 18%, replacing the earlier 25% reciprocal levy. The new rate is also lower than the 19% tariff currently imposed on Pakistan.
In a social media post, Modi wrote:
“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.”
He added that cooperation between the world’s two largest democracies creates “immense opportunities for mutually beneficial growth” and praised Trump’s leadership as “vital for global peace, stability, and prosperity.”
While Modi confirmed the tariff relief, he did not explicitly mention a broader trade deal or any commitments on Russian oil or zero tariffs for US goods.
India confirms deal, calls it ‘win-win’
Shortly after Modi’s statement, Ashwini Vaishnaw confirmed on X that India and the US had concluded a trade deal, calling it mutually beneficial.
The first indication of the development came from US Ambassador to India Sergio Gor, who posted about the Trump–Modi call. Trump later shared details in a lengthy Truth Social post, followed by Modi’s confirmation nearly two hours later.
Gor described the agreement as a major boost to bilateral ties, saying the India–US partnership has “limitless potential.”
Trump claims $500 billion purchases, Russian oil halt
In his post, Trump said the agreement goes beyond tariff cuts. He claimed India would reduce tariffs and non-tariff barriers on US goods to zero and commit to purchasing over $500 billion worth of American energy, technology, agricultural products, coal and other goods.
Trump also said India agreed to stop buying Russian oil and instead source energy from the US and possibly Venezuela, linking the move to efforts to end the Russia–Ukraine war.
“Out of friendship and respect for Prime Minister Modi, effective immediately, we agreed to a Trade Deal between the United States and India,” Trump wrote, adding that the US would lower tariffs from 25% to 18% while India would move toward zero barriers on American goods.
A White House official told HT that the additional 25% punitive tariff linked to India’s Russian oil purchases would be withdrawn as part of the arrangement, resulting in a final tariff rate of 18%.
US welcomes deal, India yet to confirm key claims
US Under Secretary of State Jacob Helberg welcomed the agreement, saying it would deepen industrial cooperation and accelerate joint projects, particularly in critical minerals and advanced technology.
External affairs minister S Jaishankar is expected to attend a critical minerals ministerial dialogue in Washington DC soon.
However, statements from Modi, Vaishnaw and commerce minister Piyush Goyal so far confirm only the tariff reduction, not the claims related to Russian oil or large-scale US purchases.
What we know so far
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US reciprocal tariff on Indian goods cut from 25% to 18%
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PM Modi publicly confirmed the tariff relief
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Ashwini Vaishnaw confirmed a concluded trade deal
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Trump says the deal is effective immediately
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Trump claims zero tariffs and non-tariff barriers for US goods
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Trump claims India will buy over $500 billion worth of US goods and energy
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Trump claims India will stop buying Russian oil
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India has not officially confirmed oil or purchase commitments
Background: A year of tense negotiations
The breakthrough comes nearly a year after India and the US launched formal trade talks during Modi’s visit to the US in February last year. The two sides held six formal negotiation rounds and several informal consultations, with a US trade delegation visiting India in December 2025.
Trade ties had been strained by steep US tariffs, including a 25% punitive levy linked to India’s Russian oil imports, along with disagreements over immigration, defence ties with Russia, and Trump’s earlier claims of mediating an India–Pakistan ceasefire.
No detailed text of the trade agreement has yet been released. The announcement also comes days after India and the European Union finalised a separate trade pact described by both sides as the “mother of all deals.”
