The United States and India have agreed to a long-anticipated trade deal aimed at easing bilateral tensions and lowering tariffs, with US President Donald Trump announcing a sharp reduction in reciprocal tariffs on Indian goods and a major purchasing commitment from New Delhi.
Trump said on Monday that the United States would cut tariffs on Indian imports to 18% from as high as 25% or 50%, “effective immediately,” following a phone call with Prime Minister Narendra Modi. The announcement was made on Trump’s Truth Social platform and marked a significant reset in trade ties between the world’s two largest democracies.
Under the agreement, India has committed to purchasing more than $500 billion worth of US energy, agricultural, coal, technology and other products, and has agreed to stop buying Russian oil, Trump said.
He claimed that Modi had agreed to stop buying Russian oil.
US President Donald Trump wrote on Truth Social: “It was an honour to speak with Prime Minister Modi. He is one of my greatest friends and, a Powerful and Respected Leader of his Country. 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! 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% to 18%. They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO. The Prime Minister also committed to "BUY AMERICAN," at a much higher level, in addition to over $500 BILLION DOLLARS of U.S. 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...”
Responding on X, Prime Minister Modi welcomed the announcement and highlighted its broader geopolitical significance.
Prime Minister Narendra Modi said: “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 world’s largest democracies work together, it benefits our 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. I look forward to working closely with him to take our partnership to unprecedented heights.”
According to Reuters, the Trump administration will also lift an additional 25% tariff that had been imposed on India in connection with its purchases of Russian oil. “We are also dropping the 25% tariff given India’s agreement to stop buying Russian oil,” a White House official said.
The trade deal follows months of negotiations and policy shifts by New Delhi, including measures announced in India’s recent budget and a push to diversify trade partnerships with the UK and the European Union. India had sharply increased Russian crude imports in recent years, with such purchases accounting for nearly 10% of its total oil imports.
India has also signed a one-year liquefied petroleum gas (LPG) import deal with the United States and passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025, opening the tightly regulated nuclear power sector to private players—moves seen as addressing key US demands.
Trump described the agreement as a major step forward in strengthening US–India relations, signalling what both sides called a new phase of economic and strategic cooperation.
