The United States and India reached a trade agreement that will immediately lower American tariffs on Indian goods to 18 percent while opening India’s market to U.S. energy and other products, President Donald Trump announced Monday.
Trump said he agreed to reduce the reciprocal tariff rate on India from 25 percent to 18 percent following a phone call with Prime Minister Narendra Modi. The administration will also drop an additional 25 percent tariff that had been imposed on India over its purchases of Russian oil.
The combined reduction brings the total tariff rate on many Indian goods down from 50 percent to 18 percent.
“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 Truth Social.
Under the agreement, India committed to reduce its own tariffs and non-tariff barriers against American goods to zero. Modi also agreed to stop purchasing Russian oil and to buy more than $500 billion worth of U.S. energy, technology, agricultural products, and coal.
“He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela,” Trump said. “This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week!”
Modi confirmed the deal in a post on X, saying he was “delighted that Made in India products will now have a reduced tariff of 18 percent.”
The agreement offers significant relief to India, which sends nearly one-fifth of its total exports to the United States. Trump’s 50 percent tariff rate had been the highest levied on any major American trading partner and had affected approximately 55 percent of India’s exports to the U.S. market.
Trade talks between the two nations had stalled last year amid disputes over India’s continued purchases of Russian crude oil. Trump imposed the initial 25 percent reciprocal tariff on India in August, followed by an additional 25 percent levy specifically targeting the Russian oil purchases.
The deal comes one week after India finalized a major free trade agreement with the European Union.
