Trump-Modi Trade Deal Slashes U.S. Tariff on Indian Goods to 18 Percent

India and the United States have reached a breakthrough in a long-standing trade dispute. On Monday, U.S. President Donald Trump announced an agreement to reduce the controversial “reciprocal tariff” on Indian imports from 25 percent to 18 percent.

Mr. Trump and Indian Prime Minister Narendra Modi spoke by telephone before Trump made the formal announcement at about 10:30 p.m. on his social media platform, Truth Social. In his announcement, Mr. Trump also claimed that Mr. Modi had agreed to curb India’s purchases of oil from Russia and increase oil imports from the United States.

According to Trump, if necessary India may also buy oil from Venezuela. Under “Buy American” policies, Mr. Trump said, India has committed to purchasing more than $500 billion worth of U.S. goods — roughly ₹46 lakh crore — including energy, technology, agriculture and coal. Following the announcement, Mr. Modi took to X (formerly Twitter) to express gratitude to President Trump on behalf of India’s 1.4 billion people.

Earlier, on April 25, Mr. Trump had imposed a 25 percent reciprocal tariff on Indian goods. In August, an additional 25 percent penalty tariff was announced, citing India’s continued oil purchases from Russia. But a White House official told news agency ANI that India will now face a total tariff of just 18 percent, with the U.S. removing the extra penalties tied to Russian oil imports.

“Speaking with Prime Minister Narendra Modi this morning was an honor,” Mr. Trump said. “We discussed the Russia-Ukraine war and other issues. Prime Minister Modi has agreed to stop buying oil from Russia and will increase purchases from the United States. We also talked about the possibility of buying Venezuelan oil. This will help end the war in Ukraine, where thousands are dying each week.”

He added, “Based on the friendship, mutual respect and his request, the United States and India have agreed to a trade deal. India’s reciprocal tariff has been lowered from 25 percent to 18 percent. India has also agreed to reduce its own tariffs and non-tariff barriers against the United States toward zero. Under ‘Buy American,’ India will purchase more than $500 billion in American goods across energy, technology, agriculture and other sectors. I am confident the U.S.–India relationship will grow even stronger.”

Modi Sees New Heights for India–U.S. Partnership

Prime Minister Modi wrote on X that speaking with President Trump was “a great pleasure.” He welcomed the tariff cut to 18 percent on “Made in India” products and thanked Mr. Trump “from the heart on behalf of India’s 1.4 billion people.”

“When the world’s two largest economies and democracies work together,” Mr. Modi wrote, “it delivers direct benefits to people and creates new, significant opportunities for cooperation. I look forward to working together and taking our partnership to unprecedented heights.”