Trump Announces US-India Trade Deal, Lowers Tariffs from 25% to 18%: "Big Decision"; Will Benefit Everyone, Says Modi

PTI, NEW DELHI, FEB 3, 2026: India and the US agreed to a trade deal under which Washington will reduce the reciprocal tariff on Indian goods to 18 percent from the current 25 percent, US President Donald Trump said on Monday after a phone conversation with Prime Minister Narendra Modi.

The Prime Minister expressed his delight, saying, "Made in India products will now have a reduced tariff of 18 percent." He continued, "Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18 percent. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement."

Modi also highlighted that when two large economies and the world’s largest democracies work together, it benefits the people and "unlocks immense opportunities for mutually beneficial cooperation." He praised President Trump’s leadership, calling it vital for global peace, stability, and prosperity. "India fully supports his efforts for peace," he added on social media platform 'X'.

The Prime Minister noted that he looked forward to working closely with Trump to elevate the bilateral partnership to unprecedented heights, although he did not address other issues mentioned by Trump on social media.

Trump, in his remarks, stated that India would move forward to reduce "tariffs and non-tariff barriers" against the US to zero, adding that New Delhi would buy American goods, including energy, worth more than USD 500 billion.

"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 percent to 18 percent," the US President said on social media.

Trump further stated that India would likewise reduce its tariffs and non-tariff barriers against the US to zero. He added that Modi had committed to purchasing American goods at a much higher level, including over USD 500 billion worth of US energy, technology, agricultural, coal, and other products.

"Our amazing relationship with India will be even stronger going forward. Prime Minister Modi and I are two people who get things done—something that cannot be said for most," he said.

In his remarks, Modi also stated, "When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation." He added, "I look forward to working closely with him to take our partnership to unprecedented heights."

Trump mentioned that he and Modi had also discussed ending the war between Russia and Ukraine. "He agreed to stop buying Russian oil, and to buy much more from the United States and, potentially, Venezuela," the US President said. "This will help end the war in Ukraine, which is taking place right now, with thousands of people dying each and every week," Trump added.

On Tuesday, the Prime Minister referred to the India-US trade deal as a "big decision" that would benefit everyone in the country. He reiterated that his government always works in favour of the nation.