The United States and India have agreed to a trade deal following a telephone conversation between US President Donald Trump and Prime Minister Narendra Modi. The announcement came after US Ambassador to India Sergio Gor confirmed the leaders had spoken earlier, with the terms of the agreement disclosed soon afterwards.
In a post on his social media platform, President Trump said he had a “very productive” exchange with PM Modi and described the Indian leader as “one of my greatest friends and a powerful and respected leader”. Talking about trade and global issues, Trump said discussions included efforts to address the war in Ukraine and India’s energy purchases.
Under the new pact, the United States will lower its reciprocal tariff on Indian goods from 25 per cent to 18 per cent, effective immediately, according to Trump’s statement. The US leader also said India has agreed to reduce its own tariffs and non-tariff barriers on US products to zero over time.
Trump’s post added that PM Modi had committed to “buy American” at higher levels, with planned purchases of over US 500 billion in US energy, technology, agricultural, coal and other goods. On energy policy, Trump said India agreed to halt purchases of Russian oil and instead increase imports from the United States and potentially Venezuela, a shift he framed as contributing to efforts to end the conflict in Ukraine.
Reacting to the announcement, Prime Minister Modi confirmed the development in a post on X, welcoming the tariff reduction and underlining the broader significance of India–US cooperation.
“Wonderful to speak with my dear friend President Trump today. 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,” PM Modi said.
The Prime Minister added that closer cooperation between the two countries would yield wider global benefits. “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” he said, while also expressing support for Trump’s efforts towards global peace, stability and prosperity.
The announcement marks a thaw after months of trade tensions, during which the US had imposed a cumulative 50 per cent tariff on Indian goods, including levies linked to India’s purchase of Russian crude, which stalled earlier negotiations on a comprehensive trade agreement.
In December, PM Modi and President Trump had also held a telephone conversation in which they reviewed progress in bilateral ties and exchanged views on regional and global developments, with both sides committing to continued cooperation on peace, stability and shared interests.