After Year of Tense Talks, India–US Reach Trade Deal, Tariffs Cut to 18%

Prime Minister Narendra Modi on Monday announced a major breakthrough in India–US trade ties, revealing that Indian goods will now face a reduced US tariff of 18% following a phone conversation with US President Donald Trump.

The announcement marks the end of nearly a year of tense negotiations that had strained bilateral relations and led to some of the steepest tariffs imposed on Indian exports.

In a post on X, Modi said he was “delighted” by the decision and thanked President Trump for the move. He said closer cooperation between the world’s two largest democracies would unlock new opportunities and benefit their people.

“Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%,” Modi wrote.

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.

When two large economies and the…

— Narendra Modi (@narendramodi) February 2, 2026

While Modi did not directly refer to a trade deal, Union minister Ashwini Vaishnaw later confirmed that India and the US had concluded an agreement, calling it a “win-win” for both countries.

Earlier, Trump announced the deal on Truth Social, describing Modi as one of his “greatest friends” and a “powerful and respected leader”. He said the US would lower its reciprocal tariff on Indian goods from 25% to 18%, while India would move to reduce its tariffs and non-tariff barriers on American products.

Trump also claimed that India had agreed to significantly increase purchases of US goods, including energy, technology and agricultural products, amounting to over $500 billion. He added that India would stop buying Russian oil, a move he said would support efforts to end the Ukraine war.

A White House official later confirmed that the final US tariff on Indian goods would be 18%, with the remaining punitive levy being dropped as part of the agreement.

The first public indication of the phone call came from US Ambassador to India Sergio Gor, who posted on X late Monday evening, calling the deal a sign of the “limitless potential” of India–US relations. Trump followed with a detailed post on Truth Social, and Modi confirmed the development shortly after.

The breakthrough comes almost a year after India and the US launched formal trade talks during Modi’s visit to Washington in February last year. Since then, both sides held multiple rounds of negotiations, even as relations suffered due to high tariffs, disagreements over Russia, immigration restrictions and Trump’s claims of mediating regional conflicts involving India.

US Under Secretary of State Jacob Helberg welcomed the agreement, saying it would inject new momentum into industrial and strategic cooperation between the two countries.

Despite the announcement, the detailed terms of the trade deal have not yet been made public.

The agreement also comes days after India and the European Union concluded a major trade pact, underscoring New Delhi’s push to strengthen global economic partnerships amid shifting geopolitical dynamics.

Also Read: ‘Stay Tuned’: Trump Speaks to PM Modi as India–US Trade Deal Nears