Trump announces US-India trade deal, lowers tariffs to 18%
Under the deal, which takes effect immediately, the US would reduce the reciprocal tariff from 25% to 18%.
US President Donald Trump today (3 February) announced that India and the United States have agreed to a bilateral trade deal, capping months of hard negotiations.
In a post on his social media platform Truth Social, Trump wrote that under the deal, which takes effect immediately, the US would reduce reciprocal tariff from 25% to 18% and India would cut its tariff and non-tariff barriers against the US to zero.
"Out of friendship and respect for [Indian] Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced reciprocal tariff, lowering it from 25% to 18%.
"They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to zero," Trump wrote.
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Trump said the Indian premier also committed to "buy American" at a much higher level, in addition to over $500 billion in energy, technology, agricultural, coal and many other products.
Trump's announcement of the deal came after a phone call with Modi earlier today.
Trump further said, "Our amazing relationship with India will be even stronger going forward. Prime Minister Modi and I are two people that get things done, something that cannot be said for most. Thank you for your attention to this matter!"
Ahead of the announcement, Trump spoke to Modi, American Ambassador to India Sergio Gor said in a post on X.
The deal comes after several months of negotiations since March 2025. In the interregnum, the Trump administration levied a steep 50% tariff on Indian exports to the US, including 25% for India's purchase of Russian crude oil, which the US claimed was indirectly financing Russia's war against Ukraine.
Trump wrote on Truth Social, "It was an honor to speak with Prime Minister Modi, of India, this morning. He is one of my greatest friends and a powerful and respected leader of his country.
"We spoke about many things, including trade and ending the war with Russia and Ukraine. He agreed to stop buying Russian Oil and to buy much more from the United States and, potentially, Venezuela. This will help end the war in Ukraine, which is taking place right now, with thousands of people dying each and every week!"
India has maintained throughout the negotiations with the US that its agriculture and dairy sectors would continue to be protected.
The India-US trade deal comes just days after India and the EU announced a Free Trade Agreement that New Delhi and Brussels called the "mother of all" trade deals.
While the European Union is India's largest trading partner as an economic bloc, the US remains India's single largest trading partner.
Modi, for his part, wrote on his X, "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."
However, there is no word from Modi on India bringing down India's tariff against US imports to zero.
Modi said, "When two large economies and the world's largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation."
He said Trump's leadership "is 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," the Indian PM added.
