US President Donald Trump said after a phone conversation with Prime Minister Narendra Modi on Monday night that India and the US have agreed to a trade deal, under which Washington will reduce reciprocal tariffs on Indian goods to 18 percent from the current 25 percent.
The Prime Minister said he was happy that “tariff on Made in India products will now be reduced to 18 percent”.
PM Modi wrote in a post on his Instagram yesterday, “It was great to talk to my dear friend President Trump today. I am happy to know that ‘Made in India’ products will now attract a lower duty of 18 per cent. On behalf of the 14 lakh people of India, many thanks to President Trump for this wonderful announcement.”
The Prime Minister said that when two major economies and the world’s largest democracies work together, it benefits people and “opens up immense opportunities for mutually beneficial cooperation”.
“President Trump’s leadership is extremely important for global peace, stability and prosperity. India fully supports his efforts for peace,” he said on ‘X’.
Modi said he looked forward to working closely with Trump to take the bilateral partnership to unprecedented heights, though he did not mention several other issues raised in Trump’s social media posts.
Trump said India would move towards reducing “tariff and non-tariff barriers” against the US to zero, and said New Delhi would buy more than US$500 billion worth of American goods, including energy.
“Out of friendship and respect for Prime Minister Modi, and in accordance with his request, effective immediately, we have agreed to a trade agreement between the United States and India under which the United States will reduce reciprocal tariffs, reducing them from 25 percent to 18 percent,” the US president said on social media.
He said India would also “move towards reducing its tariff and non-tariff barriers against the United States to zero”.
Trump said Modi has also committed to buying American goods at a very high level, including American energy, technology, agriculture, coal and many other products worth more than $500 billion.
He said, “Our wonderful relationship with India will only get stronger going forward. Prime Minister Modi and I are two people who get things done – which cannot be said about most people.”
In his address, Modi said, “When two major economies and the world’s largest democracies work together, it benefits our people and opens up immense opportunities for mutually beneficial cooperation.” He further added, “I look forward to working closely with them to take our partnership to unprecedented heights.”
Trump said he and Modi also discussed ending the war between Russia and Ukraine.
The US president said, “He has agreed to stop buying Russian oil and to buy a lot more oil from the United States and possibly Venezuela.”
“This will help end the war in Ukraine, which is killing thousands of people every week,” Trump said.
Trump and Modi last spoke on the phone in October 2025. The two leaders had agreed at a meeting in February last year to finalize the first phase of the bilateral trade agreement by autumn.
Although the two sides held several rounds of talks, progress on the trade deal stalled after Trump imposed 50 percent tariffs on Indian goods, including a 25 percent punitive tariff on India’s purchases of Russian crude.
The phone conversation between Modi and Trump took place on the same day when External Affairs Minister S Jaishankar was on a visit to Washington DC. Officials pointed out that India now has lower tariffs than competing export economies.
He cited 19 percent tariffs imposed by the US on Indonesia, 20 percent on Vietnam, 20 percent on Bangladesh and 34 percent on China.
Last week, official sources had said that India and the US have made “very significant” progress in talks for a trade deal.
