New Delhi / Washington | February 3, 2026
US President Donald Trump has announced a significant reduction in reciprocal tariffs on Indian goods, cutting the rate from 25% to 18%, while also confirming that the United States and India have reached an agreement on a long-awaited bilateral trade deal.
The announcement came shortly after a telephone conversation between President Trump and Indian Prime Minister Narendra Modi on Monday, a call that Trump described as “productive” and “respectful.”
Trump Announces Tariff Cut, Trade Agreement on Truth Social
In a post shared on Truth Social, President Trump said it was an honor to speak with Prime Minister Modi, calling him a “strong and highly respected leader.” Trump revealed that the two leaders discussed multiple global and bilateral issues, including trade relations and efforts to end the Russia-Ukraine conflict.
According to Trump’s post, Prime Minister Modi agreed to reduce India’s reliance on Russian oil and increase energy purchases from the United States and Venezuela. Trump added that, following Modi’s request and their personal rapport, both sides agreed to move forward with a trade deal immediately.
“As part of the agreement, the United States will lower reciprocal tariffs on India from 25% to 18%,” Trump said, adding that India would also reduce its tariffs and non-tariff trade barriers on US goods to zero.
Trump further stated that India has committed to purchasing more than $500 billion worth of American energy, technology, agricultural products, coal, and other goods in the coming years. He concluded by saying that US-India relations would grow even stronger in the future.
PM Modi Calls Decision Important for 1.4 Billion Indians
Responding to Trump’s announcement, Prime Minister Modi wrote on social media platform X that he was pleased following his conversation with the US President. Modi welcomed the decision to lower tariffs on “Made in India” products to 18%, calling it a significant moment for India’s 1.4 billion people.
The Prime Minister thanked President Trump and expressed confidence that the move would strengthen economic ties, enhance bilateral trade, and improve the global competitiveness of Indian exports.
Trade Talks Began Last Year, Faced Setbacks
Discussions around a US-India trade agreement began in February last year when Prime Minister Modi and President Trump met in Washington. At the time, both leaders had agreed to finalize the first phase of a bilateral trade pact.
However, negotiations stalled after the US imposed a 50% tariff on Indian goods, which included a 25% punitive tariff linked to India’s purchase of crude oil from Russia. Monday’s phone call marks a turning point in those strained negotiations.
The conversation also coincided with Indian External Affairs Minister S. Jaishankar departing for a three-day official visit to the United States, signaling renewed momentum in diplomatic and economic engagement.
India Faces Lower Tariffs Compared to Other Export Economies
Officials noted that India now faces relatively lower US tariffs compared to other major exporting nations. The United States currently imposes tariffs of 19% on Indonesia, 20% on Vietnam and Bangladesh, and 34% on China.
Earlier indications of a breakthrough had come from Commerce Secretary Rajesh Aggarwal, who recently said that consensus on the trade deal was nearly complete. A virtual meeting in December between Commerce Minister Piyush Goyal and US Trade Representative Jamieson Greer further advanced the talks.
The finalized agreement is expected to provide a major boost to bilateral trade, manufacturing, and long-term strategic cooperation between the two democracies.
