The United States has agreed to sharply reduce tariffs on Indian goods, marking a major reset in bilateral trade relations after months of tension. Following a phone conversation between US President Donald Trump and Prime Minister Narendra Modi, Washington will cut import duties on Indian products to 18% from the earlier 50%, US officials said.
President Trump described the understanding as a “historic trade deal,” while Indian officials termed it a significant step toward restoring momentum in India–US economic ties that had come under strain over energy purchases and reciprocal tariffs.
What the India–US Trade Deal Includes
According to statements issued after the talks:
The US will reduce tariffs on Indian exports to 18%
The additional 25% penalty linked to India’s Russian oil purchases will be withdrawn
India will lower tariffs and non-tariff barriers on select US goods
New Delhi will expand imports of US energy, technology, and agricultural products
The agreement is expected to immediately improve the competitiveness of Indian exports in the US market.
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…
— Narendra Modi (@narendramodi) February 2, 2026
What Trump and Modi Said
President Trump said India had committed to ending purchases of Russian oil and to significantly expanding imports from the United States, including energy and strategic commodities.
Prime Minister Modi welcomed the tariff reduction on Indian goods, describing the agreement as mutually beneficial and aligned with the shared democratic and strategic interests of both countries.
Why This Deal Matters
The tariff rollback comes after India faced the highest US import duties among major economies, a situation that had hit exporters across sectors. The new rate places India in a stronger position relative to regional competitors, though analysts say the final impact will depend on sector-specific terms and implementation details.
The development also follows the recent conclusion of India’s trade agreement with the European Union, highlighting New Delhi’s push to diversify economic partnerships amid global trade realignments.
LIVE UPDATES | India–US Tariff Deal
06:25 AM IST
Tariff cut reinforces India’s role as US strategic partner
The reduction of tariffs to 18% signals Washington’s continued view of India as a key economic and strategic partner, particularly amid efforts to counter China’s influence in global trade.
06:19 AM IST
Timeline of trade tensions
Apr 2025: US introduces reciprocal tariffs on India
Jul 2025: Additional penalties announced over Russian oil purchases
Aug 2025: Total tariffs raised to 50%
Feb 2026: Tariffs cut to 18% after Modi–Trump talks
05:34 AM IST
Leaders frame deal as ‘win-win’
Senior ministers from both sides described the agreement as beneficial for growth, energy security, and long-term cooperation.
04:50 AM IST
Exports likely to gain competitiveness
Lower duties are expected to help Indian exporters regain market share in the US, especially in price-sensitive sectors.
Big Picture
The India–US tariff agreement marks the most significant trade breakthrough between the two countries in over a decade. While the headline numbers have boosted sentiment, experts caution that the fine print will determine how durable and balanced the deal ultimately proves to be.
