US-India Trade Deal: Tariffs On Indian Goods Cut To 18%; Trump Says India Agrees To Stop Buying Russian Oil

The long-awaited trade agreement between India and US has finally shows some results; with US President Donald Trump saying that US will cut reciprocal tariffs imposed on Indian imports to 18 per cent from 25 per cent. Trump said that the trade deal between US and India, will be effective immediately.

In a post on social media platform Truth Social, Trump posted, “Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%.”

In return for lowering reciprocal tariffs on Indian goods, India will reduce tariffs and non tariff barriers on US imports to “ZERO,” Trump said. Modi, he said, has also agreed to stop buying Russian oil and instead buy more oil from the US and potentially, Venezuela.

“The Prime Minister also committed to “BUY AMERICAN,” at a much higher level, in addition to over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products,” he said.

Modi thanked Trump for the “wonderful announcement”. He said that when two of the world’s largest democracies work together, it can benefit its people and unlock opportunities for cooperation which benefits both the countries.

“Wonderful to speak with my dear friend President Trump today. 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,” Modi said in a post on X. “…I look forward to working closely with him to take our partnership to unprecedented heights.”

The announcement of a trade deal between US and India comes shortly after India has signed a Free Trade Agreement (FTA) with the European Union. The deal with EU, which is dubbed as “Mother of all deals” was in the works for 20 years and gives India a fully duty-free access to the EU’s $572.3 billion market for pharmaceuticals and medical devices. This is seen boosting India’s pharma sector and integrates India with the global supply chain. A deal with the EU was seen to have put pressure on the US to speed up negotiations.

The deal with US also came a day after the Union Budget 2026 was presented, which in part also geared up to tackle the 50 per cent tariff imposition by Trump on Indian goods. The 50 per cent cumulative tax consisted to a 25 per cent penalty on India for buying Russian oil.