US Presidnet Donald Trump, in a significant move, announced the India-US trade deal on Monday, announcing new reciprocal tariffs from the earlier 25% to 18% with immediate effect.
The announcement was made on Truth Social, where US President Trump also mentioned that India will reduce tariffs and non-tariffs on US products to ‘ZERO’, and Prime Minister Modi also agreed to ‘BUY AMERICAN’ at a higher level.
Although the claims of ‘Zero tariffs’ made by US President Trump are yet to be officially verified by the Government of India.
India drops all tariffs and non-tariff barriers to zero on US goods in a major new trade deal. President Trump announced this on Monday, right after his call with Prime Minister Modi, hailed by US Ambassador Sergio Gor’s “STAY TUNED…” post.
In return, US tariffs on Indian exports fall from 25% to 18%, capping six rounds of talks toward a $500B goal by 2030 and easing prior Russia oil penalties.
India used to charge an average tariff of about 17% on imports from most countries, including the US, under its Most Favored Nation (MFN) rules. For non-farm US goods like electronics, machines, and cars, the rate was around 13.5%. Farm products faced even higher duties, up to 100% on items like almonds, dairy, and some nuts, plus extra hurdles like strict quality standards and rules favoring local content.
In the new trade deal announced by US President Trump today, after his call with PM Modi, Trump says India drops all these tariffs and barriers to zero right away. This big step opens India’s market fully to US energy, coal, tech products, farm goods, and defence items. It helps both countries aim for $500 billion in two-way trade by 2030.
In return, the US cuts its tariffs on Indian exports from 25-50%, which included penalties for India’s Russian oil buys, down to 18%.
This ends six rounds of tough talks and aligns with Commerce Secretary Rajesh Agrawal’s words that the deal was almost done, and Piyush Goyal’s January 31 note that key problems were fixed.
The announcement timing fits with EAM Jaishankar’s US visit for critical minerals talks and US Ambassador Sergio Gor’s “STAY TUNED” post after the Trump-Modi call. India’s Union Budget 2026 also made changes to meet US needs, showing smart give-and-take amid global tensions.
While the Indian side has not announced any trade-related statements, though PM Modi in an X post said, “Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement”.
He also hailed the two great democracies of the world, unlocking great potential, and also extended support for Trump’s efforts for global peace.
