U.S. India Trade Deal Announced: Tariffs Slashed to 18%

The long-anticipated U.S. India Trade Deal was announced on Monday after months of negotiations, with U.S. President Donald Trump confirming a significant reduction in reciprocal tariffs on Indian goods. Under the India-U.S. trade deal, tariffs imposed by the United States on Indian exports have been cut from 25% to 18%, with the revised rate taking effect immediately.

Announcing the U.S. India Trade Deal on his social media platform Truth Social, President Trump said the decision was taken “out of friendship and respect” for Prime Minister Narendra Modi, following a direct conversation between the two leaders earlier in the day. Trump added that the tariff reduction reflects growing cooperation between the two countries and marks a reset after a period of heightened trade tensions.

Prime Minister Modi also welcomed the India-U.S. trade deal, stating that cooperation between the world’s largest democracies creates meaningful opportunities for mutual growth. He noted that the tariff cut would support Indian exports and strengthen economic ties, calling the agreement a positive step toward deeper bilateral engagement.

The U.S. India Trade Deal comes after a turbulent trade phase that saw tariffs on Indian goods rise as high as 50% in 2025, largely linked to geopolitical concerns and India’s energy purchases from Russia. With the latest announcement, both sides have signalled intent to move toward a broader bilateral framework addressing tariffs, market access, and non-tariff barriers.

Trade and industry bodies have described the India-U.S. trade deal as an important first step toward a comprehensive bilateral trade agreement, noting that further details are expected in the coming weeks. The development follows closely on the heels of India’s recently concluded trade agreement with the European Union, underscoring India’s growing role in global trade negotiations.