India and US reach trade deal, America cuts tariff from 50% to 18%; PM Modi and Trump hold talks

New Delhi (The Uttam Hindu): A long-awaited India–US trade deal was announced on Monday. US President Donald Trump declared that the United States has reduced the reciprocal tariff on India from 25 percent to 18 percent. Earlier, India was facing a total tariff burden of 50 percent, which also included a 25 percent penalty tariff imposed in August due to India’s purchase of crude oil from Russia. With the new decision, the additional penalty linked to Russian oil has been withdrawn, bringing the overall tariff down to 18 percent.

Earlier in the day, Prime Minister Narendra Modi and President Trump spoke over the phone. Later, at around 10:30 pm, President Trump formally announced the trade deal on his social media platform Truth Social. Trump claimed that Prime Minister Modi had agreed to stop purchasing oil from Russia and increase oil imports from the United States.

According to Trump, India may also buy oil from Venezuela if required. He further said that under the ‘Buy American’ policy, India will purchase goods worth more than $500 billion (around ₹46 lakh crore) from the United States. Following the announcement, Prime Minister Modi responded on social media platform X, thanking President Trump on behalf of 1.4 billion Indians.

In his post, President Trump said it was an honor to speak with Prime Minister Modi and that several important global issues, including the Russia–Ukraine conflict, were discussed. He stated that Modi agreed to reduce dependence on Russian oil and expand energy cooperation with the US. Discussions were also held on the possibility of sourcing oil from Venezuela, which Trump said could support efforts to end the Ukraine war.

Trump added that due to Prime Minister Modi’s friendship and request, both countries reached an immediate agreement on the trade deal. Under the agreement, the US will lower tariffs on Indian goods to 18 percent, while India will also move towards reducing tariff and non-tariff barriers against American products. India will additionally purchase large quantities of energy, technology, agriculture, coal, and other goods from the US.

Prime Minister Modi, in his message on X, said he was pleased with the conversation and described the reduction of tariffs on ‘Made in India’ products as a welcome step. He thanked President Trump for the decision and reaffirmed India’s commitment to taking the India–US partnership to new heights, stating that cooperation between the world’s two largest democracies benefits people in both nations.