Historic US–India Trade Deal: Tariffs slashed as leaders seek stronger economic ties  

The tariff cut is expected to boost competitiveness for Indian exports in the US market, offering relief to sectors such as textiles and seafood that had been hit by earlier duties

PRAVASISAMWAD.COM

The United States and India have agreed a significant trade deal after months of negotiations, signalling a reset in economic relations between the two nations. On 2 February 2026, US President Donald Trump announced that Washington would reduce tariffs on goods imported from India to 18 per cent, down from earlier levels that combined to as much as 50 per cent.

In a post on his social media platform, Truth Social, President Trump said the agreement was reached “out of friendship and respect” for Prime Minister Narendra Modi and at Modi’s request. He added that the United States would apply a lower reciprocal tariff of 18 per cent with immediate effect.

Prime Minister Modi responded on social media with gratitude, thanking President Trump “on behalf of the 1.4 billion people of India” for the tariff reduction. Modi described the conversation as “wonderful” and said the move would benefit Indian exporters, particularly those working under the ‘Made in India’ initiative.

The deal also involves broader commitments, according to Trump, including India’s agreement to reduce its own tariffs and non-tariff barriers on US goods to zero and to increase purchases of American products across energy, technology, agriculture and other sectors. Trump linked these steps to efforts to support peace and economic cooperation.

A key element of the agreement is the removal of a punitive tariff imposed over India’s previous purchase of Russian oil, which was tied to geopolitical tensions. In exchange, India has signalled it will stop buying Russian crude and look to purchase more oil from the United States and potentially Venezuela.