India and the US have announced a key trade deal that will reduce the existing 25% to 18% reciprocal tariffs on Indian imports. me $500 million trade deal The announcement was made after a telephonic conversation between Prime Minister Narendra Modi and US President Donald Trump on Monday.
Trump said on Monday that the two sides had struck a trade deal that would see New Delhi cut its tariffs to zero and buy more than $500 billion worth of American goods. (Reuters)Also read: Trump Envoy Sergio Gore India Deal Key Figure: Get to Know the ‘Mayor of Mar-a-Lago’
Trump later said the two sides had struck a trade deal that would see New Delhi reduce its tariffs to zero and buy more than $500 billion worth of American goods. Track India-US Trade Agreement Updates
The first mention of the phone call came in the form of a social media post from US Ambassador Sergio Gore at 9.16am, followed by a lengthy post by Trump on Truth Social more than an hour later and then a social media post by the Prime Minister about two hours later.
Also read: From ‘Mogambo Khush Hua’ to ‘Win-Win’: India-US trade deal sparks reaction from political leaders
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D The announcement ends nearly 12 months of tense negotiations It has strained bilateral relations and the US has imposed some of the world’s highest tariffs on India as the Trump administration has been pressing India for months to reduce its reliance on cheap Russian crude.
Why a trade deal now?Trump said on his social media that Modi “agreed to stop buying Russian oil and buy more from the US and possibly Venezuela.”
“This will help end the war in Ukraine, which is going on now, killing thousands every week!” Trump said as he called Prime Minister Modi one of his best friends and a strong and respected leader of India.
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Trump also said he agreed to a trade deal “out of friendship and respect for Prime Minister Modi and at his request.”
“Out of friendship and respect for Prime Minister Modi and, at his request, effective immediately, we have agreed to a trade agreement between the United States and India, whereby the United States will charge a reduced reciprocal tariff, bringing it down from 25% to 18%. They will likewise move to reduce their tariff and non-tariff barriers against the United States,” the US president said.
Trump added, “The prime minister has committed to a much higher level of ‘Buy American’ in addition to more than $500 billion in US energy, technology, agriculture, coal and many other products.”
What Prime Minister Modi saidPrime Minister Modi went to X on Monday as he thanked Trump for cutting tariffs “on behalf of the 1.4 billion people of India”. He said that Trump’s leadership is very important for world peace, stability and prosperity. India fully supports his efforts for peace.
“When two large economies and the world’s largest democracies work together, it benefits our people and opens up enormous opportunities for mutually beneficial cooperation,” Modi wrote in X.
Timeline of tariffs imposed by the US on Indian goodsApril 2, 2025 – The US imposes 26% “reciprocal duties” on several Indian imports as part of its global “Liberation Day” tariff action.April 10, 2025 – Trump suspends tariffs for 90 days and maintains a 10% tariff on all US imports.July 31, 2025- Trump announces 25% tariffs on all Indian goods and says it will levy penalties if India continues to buy Russian oil.August 7, 2025 – Trump hikes tariffs on Indian goods to the US to 50%, citing the Asian nation’s continued purchase of Russian oil. Tariffs on Indian goods were the highest among US trading partners.with input from organizations
