Tariffs reduced from 25% to 18%: PM Modi, Donald Trump announce India-US trade deal

New Delhi: President Donald Trump on Monday spoke to Prime Minister Narendra Modi and announced on Truth Social a trade deal, which would lead to Washington, DC, lowering the reciprocal tariff on India from 25% to 18%, and New Delhi abolishing the tariffs and non-tariff barriers on imports from the United States.

Modi too took to the X to convey his “big thanks” to Trump for lowering the tariff on India’s imports to the US to 18%. The prime minister, however, did not mention any trade deal in his post on the social media platform, unlike the US president. New Delhi’s envoy to Washington, D.C., Vinay Mohan Kwatra, however, confirmed on the social media platform that the India-US trade deal had been announced.

Trump did not clarify in his post whether Washington, D.C., would also withdraw the additional 25% tariff on India’s exports to the US, imposed in August 2025 to dissuade it from buying oil from Russia.

A spokesperson for the US embassy in New Delhi, however, confirmed that the final tariff on imports from India would be reduced to 18%.

Trump and his aides had earlier accused India of helping President Vladimir Putin carry on the war in Ukraine by continuing to import oil from Russia. They had accused India of circumventing the sanctions imposed by the US and the European Union on Russia after it launched the war against Ukraine in February 2022.

The US president, however, had repeatedly claimed that he had succeeded in persuading the prime minister of India to slash oil imports from Russia. He had also claimed recently that Washington, D.C., and New Delhi already had a deal for India to buy oil from Venezuela, now under the control of the United States, instead of purchasing from Iran.

Trump on Monday said that Modi had agreed not only to stop buying oil from Russia but also to import hydrocarbons in larger quantities from the US, and potentially, Venezuela, instead. The prime minister also committed that India would buy energy, technology, coal, agricultural and many other products worth over $500 billion from the US, he claimed.

“Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India,” Trump wrote on the social media platform.

“This (India’s decision to stop buying oil from Russia) will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week!” the US president posted on Truth Social.

“Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi posted on X. “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”

The prime minister also stated that the US president’s leadership was 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,” added Modi.

India recently refrained from showing up at a ceremony held in Davos, Switzerland, on January 22 for the signing of the charter of the ‘Board of Peace’, a body envisaged by Trump as a global peace-making platform, beginning with the Gaza Strip – the scene of Israel-Hamas conflict since October 2023 – but extending to other hotspots around the world too.

Just a few days after Trump had returned as the 47th American president, Modi had met him at the White House in Washington, D.C., on February 13, and the two leaders had agreed that India and the US would negotiate a trade deal. The relations between the two sides, however, came under stress, not only due to Trump’s tariff tirade against India, but also because of the US president’s bonhomie with the civil and military leaders of Pakistan and his repeated claims about brokering a truce to end the four-day cross-border military flare-up between the two South Asian nations in May 2025. The breakthrough in the negotiations for the trade deal also remained elusive.