U.S. to Reduce Tariffs on India to 18% in Trade Agreement

U.S. and India Reach Trade Agreement

The United States and India have finalized a trade deal, which will lead to an immediate reduction of U.S. tariffs on Indian goods to 18%. This move is meant to open India’s market further to American energy and various products, as announced by President Trump on Monday.

Following a phone conversation with Prime Minister Modi, President Trump stated that both nations would lower the reciprocal tariffs on India from 25% to 18%. Additionally, the U.S. plans to eliminate a 25% tariff that had been imposed on Indian purchases of Russian oil.

This arrangement will effectively decrease the total tariff rate on numerous Indian items from 50% to 18%.

“In the spirit of friendship and respect for Prime Minister Modi, and upon his request, we’ve come to an agreement that is effective immediately,” Trump shared on Truth Social.

As part of this arrangement, India has committed to eliminating both tariffs and non-tariff barriers on U.S. products. Prime Minister Modi also agreed to cease purchasing Russian oil and to acquire over $500 billion in U.S. energy, technology, agricultural products, and coal.

Trump noted, “We’ve agreed to stop importing Russian oil and to buy more from the United States and possibly Venezuela. This is crucial to help resolve the ongoing conflict in Ukraine, where countless lives are at stake!”

In response, Prime Minister Modi confirmed the agreement in a post on X, expressing satisfaction that tariffs on Indian-made products would be scaled back to 18%.

This deal is significant for India, which sends nearly 20% of its total exports to the U.S. Trump’s previous 50% tariff was the highest ever imposed on a major trading partner and impacted approximately 55% of India’s exports to the U.S. market.

Negotiations between the two countries hit a snag last year due to disputes over India’s ongoing purchases of Russian oil. Trump initially set a 25% reciprocal tariff on India in August, followed by another 25% specifically aimed at Russian oil imports.