President Trump announces US-India trade deal, lowers tariffs from 25 pc to 18 pc

India and the US agreed to a trade deal under which Washington will bring down reciprocal tariff on Indian goods to 18 per cent from current 25 per cent, US President Donald Trump said on Monday after a phone conversation with Prime Minister Narendra Modi.

The prime minister said he was delighted that "Made in India products will now have a reduced tariff of 18 per cent".

"Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18 per cent. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement," Modi said.

The prime minister said when two large economies and the world's largest democracies work together, it benefits the people and "unlocks immense opportunities for mutually beneficial cooperation".

"President Trump's leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace," he said on 'X'.

Modi noted that he looked forward to working closely with Trump to take the bilateral partnership to unprecedented heights, without mentioning many of the other issues that figured in Trump's post on social media.

Trump said India will move forward to reduce "tariffs and non tariff barriers" against the US to zero, adding New Delhi would buy American goods, including energy, worth more than USD 500 billion.

"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 per cent to 18 per cent," the US president said on social media.

India will "likewise move forward to reduce their tariffs and non tariff barriers against the United States, to zero", he said.

Trump said Modi also committed to buy American goods at much higher level, in addition to over USD 500 billion dollars of US 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," he said.

In his remarks, 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."

"I look forward to working closely with him to take our partnership to unprecedented heights," he added.

Trump said Modi and he also discussed ending the war between Russia and Ukraine.

"He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela," the US president said.

"This will help end the war in Ukraine, which is taking place right now, with thousands of people dying each and every week," Trump said.

Trump and Modi last spoke on phone in October 2025.

The two leaders had agreed at a meeting in February last year to finalise the first tranche of a bilateral trade agreement by the autumn.

Though the two sides held several rounds of negotiations, forward movement on the trade deal stalled after Trump imposed 50 per cent tariffs on Indian goods, including the 25 per cent punitive tariffs for India's procurement of Russian crude oil.

The Modi-Trump phone talks came on a day External Affairs Minister S Jaishankar travelled to Washington DC.

India has now lower tariff compared to competing export economies, officials said.

They cited 19 per cent American tariffs on Indonesia, 20 per cent on Vietnam, 20 per cent on Bangladesh and 34 per cent on China.

Official sources last week said India and the US have made "very significant" progress in the negotiations for the trade deal.