New Delhi/Washington: India and the United States on Monday (February 2) agreed on a billion-dollar billion trade deal under which Washington will bring down reciprocal tariff on Indian goods to 18 per
cent from the current 25 per cent. The announcement in this regard was made by US President Donald Trump on Monday after a phone call with Prime Minister Narendra Modi.
The Prime Minister thanked Trump for the deal. “Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi said on ‘X’.
“When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation. President Trump’s leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace. I look forward to working closely with him to take our partnership to unprecedented heights,” PM Modi added.
Meanwhile, Trump claimed India will move forward to reduce its “tariffs and non-tariff barriers” against the US to zero.
“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 per cent to 18 per cent,” the US President said on social media.
Here are key takeaways of the deal:
- The US will cut reciprocal tariffs on Indian goods from 25 per cent to 18 per cent.
- According to the US President, India will reduce tariffs and non-tariff barriers to zero.
- Trump also claimed that after the deal, India will stop buying Russian oil.
- The US President said that New Delhi will now buy crude oil from Venezuela.
- Trump claimed that the deal will help in bringing an end to the Russia-Ukraine war.
- Trump said that India has committed to buying USD 500 billion of US goods from different sectors, including energy and agriculture.
Here’s what Trump said in his Truth Social post:
“It was an honour to speak with Prime Minister Modi. He is one of my greatest friends and a powerful and respected leader of his country. We spoke about many things, including trade, and ending the war with Russia and Ukraine. He agreed to stop buying Russian oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week!” the US President said in his Truth Social post.
“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%. They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO. 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. Our amazing relationship with India will be even stronger going forward. Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most,” he added.
PM Modi–Trump phone call:
Trump on Monday spoke to PM Modi ahead of the much-awaited trade deal. Before the call, he posted an image of the 19 January 2026 edition of India Today magazine featuring him along with the Indian Prime Minister.
The title on the magazine read “NEWSMAKERS OF THE YEAR 2025,” with “The mover & the shaker” as the subheadline.
“BOLSTERED BY ELECTORAL WINS, MODI PUSHED FULL STEAM AHEAD WITH HIS REFORM EXPRESS IN 2025 EVEN AS HE COUNTERED THE DISRUPTIONS UNLEASHED BY DONALD TRUMP,” read the cover page of the magazine posted by Trump.
