NEW DELHI, Feb 3 — United States (US) President Donald Trump said on Monday he will cut tariffs on Indian goods to 18 per cent after reaching a trade deal with Indian Prime Minister Narendra Modi, which includes India’s agreement to stop buying Russian oil.
India will “likewise move forward to reduce” its tariffs and non-tariff barriers against the US to “zero”, Trump said in a post on the social media platform Truth Social, announcing the deal after a phone conversation with Modi.
The US leader said Modi also committed to buying American goods “at a much higher level,” in addition to purchases of over US$500 billion in energy, technology, agricultural, coal, and other products.
“Our amazing relationship with India will be even stronger going forward,” Trump said.
Last year, Trump introduced 25 per cent tariffs on imports from India and levied an additional 25 per cent penalty on Russian energy imports.
“We spoke about many things, including trade, and ending the war with Russia and Ukraine. He agreed to stop buying Russian oil, and to buy much more from the US and, potentially, Venezuela,” Trump wrote in his Truth Social post, adding that the India deal will help him end the Russia-Ukraine war.
India became a major buyer of Russian oil since the Ukraine conflict began in 2022, but its companies have recently begun cutting their Russian energy imports under US tariff pressure.
Trump’s announcement was greeted with euphoria in India.
“Delighted that ‘Made in India’ products will now have a reduced tariff of 18 per cent. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi said on the social media platform X.
“President Trump’s leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace,” he said.
Indian Commerce Minister Piyush Goyal hailed the agreement as “historic”, saying it will unlock “unprecedented opportunities” for Indian farmers and businesses, and help India get technology from the US.
“It is not just a trade deal – it is a historic turning point that will reshape India-US relations,” Goyal said.
“Thrilled by the news of the trade deal this evening,” the US ambassador to India, Sergio Gor, said, emphasising that the bilateral relationship has “limitless potential.”
Nitin Nabin, president of the ruling Bharatiya Janata Party (BJP), called the deal a boost for the Indian economy, while Home Minister Amit Shah said it will “elevate our strategic partnership”.
US-India goods and services trade totalled about US$212.3 billion in 2024, according to US trade figures.
The US goods trade deficit with India was US$45.8 billion in 2024, with the value of merchandise trade recorded at US$128.9 billion.
The punitive tariffs imposed earlier by Trump had become a significant disadvantage for Indian exporters.
“This is a major economic and diplomatic win for India,” said Shamika Ravi, a member of Modi’s economic advisory council.
