Modi–Trump Trade Deal Slashes US Tariffs on India to 18%
Prime Minister Narendra Modi and US President Donald Trump have finalised a major trade agreement that cuts US tariffs on Indian goods to 18%. As a result, Indian exporters will gain immediate relief. After months of tension, the deal signals a clear reset in bilateral ties. Modi confirmed the development after speaking with Trump on Monday. Notably, the reduced tariff replaces earlier punitive rates that had strained trade flows. Overall, both leaders framed the agreement as a decisive economic win.
Meanwhile, India Commits to Higher US Imports
Under the agreement, India will significantly raise imports from the United States. According to Trump, New Delhi will purchase over $500 billion worth of American energy, technology and agricultural products. At the same time, India will move to cut tariffs and non-tariff barriers on US goods to zero. However, Modi’s public statement focused on tariff relief rather than import commitments. Subsequently, Union minister Ashwini Vaishnaw confirmed the trade deal and called it mutually beneficial.
After a Year of Talks, Trade Tensions Ease
For nearly 12 months, negotiations remained stalled as Washington imposed tariffs of up to 50% on Indian goods. In response, India raised concerns over fairness and market access. Despite repeated setbacks, both sides continued discussions through six formal rounds. Eventually, a US trade delegation’s December 2025 visit helped revive momentum. Following the breakthrough, the White House confirmed that additional duties would be dropped. Consequently, the final tariff now stands at 18%, lower than many regional competitors.
Finally, Strategic Ties Gain Fresh Momentum
Beyond trade, officials expect the deal to deepen cooperation in critical minerals, clean energy and manufacturing. Importantly, American leaders said the agreement frees political space for targeted industrial projects. In turn, Modi praised Trump’s leadership and highlighted shared democratic values. Soon after, analysts linked the deal to India’s broader push for global trade diversification. Taken together, the agreement marks a turning point in India–US economic relations.
