US–India Trade Deal: Reciprocal Tariffs Reduced to 18% After Modi–Trump Talks

Following a phone conversation with Prime Minister Narendra Modi, US President Donald Trump declared that India and the US have reached a major trade agreement that will lower US reciprocal tariffs on Indian goods to 18% from previously much higher levels. 

Following talks with Modi, Trump claimed in a social media post that the agreement was achieved “effective immediately” with a lower tariff rate. Additionally, he stated that India would endeavor to reduce its own tariffs and non-tariff barriers on US exports, possibly to zero, though Indian authorities have not yet formally acknowledged these specifics. 

On behalf of India’s 1.4 billion citizens, Prime Minister Modi applauded the action and emphasized the advantages of cooperation between the two sizable economies and democracies. 

Following punitive levies connected to New Delhi’s purchase of Russian crude, US charges on Indian exports increased to as high as 50%. The new tariff rate reverses the prior trade disputes. According to several sources, the United States has reduced the base reciprocal duty to 18% and removed the additional punitive tax under the amended agreement. 

The rupee and Indian stocks both saw increases in response to the market’s optimistic outlook that the uncertainty around tariffs impacting exporters would lessen. 

It is anticipated that both governments will proceed with formal paperwork and additional negotiations on more comprehensive trade arrangements, such as the Bilateral Trade Agreement, which has been under discussion for more than a year.