US agrees to trade deal with India, cuts tariffs after Trump–Modi talks
Guwahati: US President Donald Trump has announced that he has agreed to a trade deal with India following a phone conversation with Prime Minister Narendra Modi, a move expected to ease months of trade tensions between the two countries.
In a post on Truth Social, Trump said the United States would lower tariffs on goods imported from India to 18 per cent from the current 25 per cent. He also said an additional 25 per cent tariff penalty imposed over India’s purchase of Russian oil would be withdrawn as part of the agreement.
Trump claimed that India had agreed to reduce its tariffs and non-tariff trade barriers to zero and committed to sharply increasing purchases of American goods. According to him, India would buy more than 500 billion dollar worth of US products, including energy, technology, agriculture and coal.
The US President also said Modi had agreed to stop buying Russian oil and instead source more oil from the United States and potentially Venezuela. He added that the trade deal was finalised immediately at Modi’s request during their conversation, which also covered the Russia-Ukraine war.
Prime Minister Modi welcomed the announcement, saying he was delighted that an agreement had been reached. In a post on X, he thanked Trump and said cooperation between the world’s two largest democracies would benefit their people and create new opportunities for mutually beneficial growth.
The trade relationship between the two countries had come under strain after the US imposed steep tariffs on Indian goods in August, including a penalty linked to India’s continued purchase of Russian oil. Indian exports to the US declined sharply after the tariffs took effect.
A White House official later confirmed that the Russia-linked tariff penalty would be dropped and that other tariffs would be reduced to bring the overall rate down to 18 per cent.
The announcement comes days after India and the European Union concluded a major free trade agreement aimed at lowering tariffs on nearly all goods and deepening economic ties. Analysts said the Washington–Delhi deal could help the US counter growing trade engagement between India and the EU.
US markets reacted positively to the announcement, with stocks edging higher following Trump’s post.