US-India Agree To Trade Deal; Reciprocal Tariff On India To Be Cut To 18%

The United States has announced a tariff cut on Indian goods after a phone call between Prime Minister Narendra Modi and US President Donald Trump. Trump said a new Trade Deal is in place, under which Washington will lower its reciprocal import duty on Indian products from 25% to 18% with immediate effect.

Trump also claimed that India has promised major policy changes in return. According to the statement, New Delhi will work towards bringing its tariffs and non-tariff restrictions on American exports “to ZERO” and has committed to increase purchases of a wide range of US goods, including energy, technology and farm products, over the coming years.

US India trade deal tariff and previous duties

Before this announcement, India faced some of the highest US tariff levels. Washington had earlier imposed a 25% Liberation Day duty on a wide basket of Indian imports last year. The United States later added another 25% tariff on Indian purchases of Russian oil, pushing overall trade costs sharply higher for Indian exporters.

The latest move follows a detailed conversation between Trump and Modi, which Trump described as friendly and wide-ranging. The two leaders discussed trade ties, India’s energy sourcing choices and the ongoing conflict between Russia and Ukraine. Trump linked the new tariff rates and broader Trade Deal directly to requests made by Modi during this conversation.

US India trade deal tariff and energy commitments

Trump said India has agreed to halt crude oil imports from Russia and instead buy more from the United States and possibly Venezuela. Trump argued that diverting Indian energy purchases in this way could help limit funding to Russia and reduce the intensity of the war in Ukraine, where heavy casualties continue.

Key figures mentioned by Trump include a pledge from Modi to “BUY AMERICAN” at higher levels. Trump said this will sit alongside plans for India to import goods worth over $500 billion from the United States. The list covers energy supplies, technology equipment, agricultural products, coal and several other categories, according to Trump’s post.

The tariff shift and related promises were announced through a detailed note on Trump’s Truth Social account. In that post, Trump described Modi as a close ally and stressed that the tariff cut takes effect straight away. Trump framed the decision as a response to Modi’s request and as part of a broader effort to reset economic ties.

Trump wrote: "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! 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, 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. The Prime Minister also committed to "BUY AMERICAN," at a much higher level, in addition to over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products. 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! PRESIDENT DONALD J. TRUMP"