Prime Minister Narendra Modi on Monday welcomed a significant reduction in tariffs on Indian exports to the United States following an announcement by US President Donald Trump that the two countries had reached a bilateral trade agreement aimed at lowering reciprocal duties. Under the new arrangement, tariffs on Made in India products entering the US market will be reduced to 18%, marking a notable shift in trade relations between the two major economies.
The agreement also provides for the withdrawal of an additional 25% tariff that had been imposed by the United States in response to India’s continued purchases of Russian oil. The rollback follows New Delhi’s reported commitment to halt imports of Russian crude and to increase its energy purchases from the United States, with the possibility of sourcing supplies from Venezuela as well.
In a message posted on X, Prime Minister Modi expressed appreciation for the decision, describing it as a positive step for bilateral cooperation. He said the reduction in tariffs on Indian products would benefit domestic manufacturers and exporters, and thanked President Trump for the move on behalf of the Indian people. Modi also underlined the broader significance of closer cooperation between India and the United States, noting that collaboration between the world’s largest democracies and major economies could generate wide-ranging benefits and open new avenues for mutually beneficial engagement.
The prime minister further said that strong leadership and cooperation between New Delhi and Washington were essential for global peace, stability, and prosperity. He added that India looked forward to working closely with the US administration to elevate the strategic partnership to new levels.
The announcement drew a positive response from the US Ambassador to India, Sergio Gor, who highlighted the personal rapport between the two leaders and described the relationship between the two countries as having vast potential. He pointed to opportunities for deeper cooperation across trade, energy, and technology sectors following the agreement.
President Trump earlier said the trade deal was finalised after a direct conversation with Prime Minister Modi, during which a range of issues were discussed, including trade, global security, and efforts to end the conflict between Russia and Ukraine. Trump stated that India had agreed to stop buying Russian oil and instead significantly expand imports of US energy, technology, agricultural products, and other goods. He said these commitments would contribute to broader international efforts to reduce tensions linked to the war in Ukraine.
According to Trump, the agreement includes reciprocal steps, with India moving to reduce its tariffs and non-tariff barriers on US goods. He said the revised framework reflected mutual respect and a shared commitment to strengthening economic ties. The US president also indicated that India had committed to purchasing more than $500 billion worth of American products over time, spanning multiple sectors.
A White House official, cited by AFP, confirmed that the additional 25% tariff imposed on India over its Russian oil imports would be withdrawn following New Delhi’s agreement to end such purchases. The tariff had been part of a broader push by the US administration to pressure countries to reduce reliance on Russian energy amid the ongoing conflict in Ukraine.
The United States has also been playing a central role in managing Venezuelan oil exports following recent political developments in the South American country. Against this backdrop, energy cooperation has emerged as a key pillar of the evolving US-India trade relationship.
Trade negotiations between India and the United States have faced hurdles in recent years, despite high-level diplomatic engagement. Prime Minister Modi was among the first foreign leaders to visit the White House after President Trump began his second term in January 2025, but talks over tariffs and market access remained complex. While Trump had previously indicated that Modi had promised to reduce Russian oil purchases, a formal agreement had not been reached until now.
The latest deal signals a renewed push by both sides to overcome long-standing trade frictions and deepen economic cooperation, as India and the United States seek to align their strategic and commercial interests in a rapidly changing global landscape.
