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After a direct conversation between President Donald Trump and Prime Minister Narendra Modi, the US announced a major tariff reduction on Indian products, marking a clear reset in strained India-US trade relations.
In a significant boost to India-US relations, US President Donald Trump on Monday announced a major trade agreement with India, sharply reducing tariffs on Indian goods. The move came shortly after Trump held a telephonic conversation with Prime Minister Narendra Modi, signalling a clear easing of tensions caused by steep tariffs imposed earlier.
President Trump announced that reciprocal tariffs on Indian goods would be reduced to 18 per cent, bringing them down from earlier levels. While Trump initially referred to a reduction from 25 per cent to 18 per cent, he later clarified that under the trade deal, US tariffs on Indian goods would be slashed from as high as 50 per cent to 18 per cent.
Reacting to Trump’s post on the Truth Social platform, Prime Minister Narendra Modi said that “Made in India” products will now attract a reduced tariff of 18 per cent. Thanking the US President, PM Modi tweeted, “Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.”
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According to President Trump, the agreement was reached “out of friendship and respect for Prime Minister Modi” and at Modi’s request. Trump stated that India has committed to buy American products at a much higher level, including over $500 billion worth of US energy, such as oil, coal, and other resources. He added that India would also increase purchases of US technology, agricultural goods, and other products.
As part of the deal, Trump said India would halt purchases of Russian oil and instead buy energy from the United States and potentially Venezuela. He also claimed that India has agreed to reduce its tariffs and non-tariff barriers on US goods to zero.
Before Trump returned to office and imposed sharp tariff hikes last year, India had some of the world’s highest import duties. According to World Trade Organization data, India’s simple applied tariff stood at 15.6 per cent, while the effective applied tariff was 8.2 per cent.
Following the announcement, PM Modi posted a message on X, stating that self-confidence is the nation’s biggest strength, and that this collective power of Indians would help realise the vision of a developed India.
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.
— Narendra Modi (@narendramodi) February 2, 2026
When two large economies and the…
