The United States reduced the reciprocal tariff it charges on imports from India from 25% to 18%, President Donald Trump announced on Monday after a phone conversation with PM Modi.
He added that India would likewise move to cut its own tariffs and non-tariff barriers on US goods to zero, likely a part of the much anticipated trade deal between the global powers.
"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 US President's post read.
PM Modi welcomed the tariff cut as a boost for Indian industry and exporters.
“Wonderful to speak with my dear friend President Trump today,” he wrote, adding that Made in India products would now attract a reduced tariff of 18%. Modi thanked Trump “on behalf of the 1.4 billion people of India for this wonderful announcement,” he wrote on X.
The announcement comes against the backdrop of a bruising trade dispute that saw US tariffs on Indian exports surge as high as 50% last year - tariffs that Washington linked to New Delhi’s continued purchases of Russian crude oil.
Speaking on that particular issue, Trump said that in the most recent phone call, India had agreed to stop buying Russian oil and instead increase purchases from the United States and, potentially, Venezuela.
"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!," Trump's post further read.
Meanwhile, according to Reuters, a White House official said that Washington is willing to drop the additional 25% tariff slapped onto New Delhi over Russian oil.
"We are also dropping the 25% tariff given India's agreement to stop buying Russian oil," the official said, according to the news agency.
The comments came as global oil markets reacted sharply to the prospect of shifting energy flows. WTI crude oil futures slid more than 4.5% on Monday to around $62.2 a barrel, marking their steepest single-day fall in over six months.
The US President's announcement also comes amid EAM Jaishankar's visit to Washington for a meeting with officials over critical minerals.
The finalisation of a full trade pact between the two countries, long seen as a major opportunity for deeper market access and counter to Trump's tarrifs, has repeatedly been delayed before the scheduled deadlines, becoming one of the key uncertainties in the bilateral economic relationship.
"As I have said many times, President Trump genuinely considers Prime Minister Modi a great friend! Thrilled by the news of the trade deal this evening. The relationship between the United States and India has LIMITLESS POTENTIAL!," said Sergio Gor, US Ambassador to India.
Union Minister for Trade and Commerce Piyush Goyal had said on Friday that the two countries were working toward closing the deal quickly.
"Every free trade agreement stands on its own legs. And we are having very good negotiations. My counterpart in the US and I have a very wonderful working relationship and a wonderful personal friendship. We are working towards closing the deal quickly," Goyal told PTI in an interview.
The 50% US tariffs hit Indian apparel, footwear, textiles, engineering goods and other consumer-facing manufacturing sectors the hardest, forcing exporters to absorb steep cost increases and offer deep discounts to retain American buyers.
Despite the shock, India’s exports have held up better than expected, according to the Economic Survey 2026, which pointed to strong domestic fundamentals and policy reforms that helped cushion the impact of rising US duties.
“But in reality, growth accelerated due to a slew of structural reforms and policy measures,” the Survey said, adding that India’s external position remains strong in the near term.
Source Name : Economic Times