New Delhi: US President Donald Trump, in a post on his social media platform Truth Social, announced a new trade agreement with India that lowers reciprocal
tariffs on Indian goods to 18 per cent. Trump also claimed that India has agreed to halt Russian oil purchases and increase imports from the United States.
While details of the trade deal are yet to emerge, the reduced tariffs on Indian goods will come as a relief for exporters. The announcement also comes after more than six months — in August 2025, Trump had announced a 25 per cent reciprocal tariff and a 25 per cent levy on India’s purchase of Russian oil, taking the total tariff to 50 per cent. This had severely impacted certain exporter segments that were facing competition from goods from Vietnam and China, which were subject to lower tariffs than India.
“It was an Honor to speak with Prime Minister Modi, of India, this morning… 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” – President Donald J. Trump 🇺🇸 pic.twitter.com/RD7PZ8S16z
— The White House (@WhiteHouse) February 2, 2026
Status on 25 per cent penalty tariff
In a post on X, Modi said he had a “wonderful” conversation with Trump and welcomed the lower tariff rate for Indian products.
“Delighted that Made in India products will now have a reduced tariff of 18 per cent. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi said.
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.
When two large economies and the…
— Narendra Modi (@narendramodi) February 2, 2026
It was not clear from either Trump’s or PM Modi’s posts what the status of the 25 per cent penalty tariff is. US envoy to India Sergio Gor, in an interview with CNN-News18, confirmed that the Trump administration is cutting tariffs on Indian imports from 50 per cent to 18 per cent.
“All the credit goes to President Trump and PM Modi. The two leaders have a great personal relationship, which has carried the deal forward. The number that will be finalised will be 18 per cent,” Gor said. While a few technical issues will be worked out over the next two to three days, Gor said the deal is official. “It’s done,” he told NDTV.
What we know so far of the deal
India to stop Russian crude imports?
Trump in his post said PM Modi has agreed to stop buying Russian oil, a claim that has not yet been confirmed by Indian officials. Russian crude has been a bone of contention between the two countries, with Trump and his advisers repeatedly accusing India of “bankrolling the Russian war machine in Ukraine” by purchasing discounted crude from Moscow. “This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week!” he wrote.
Trump also said that India would purchase oil from the US and potentially Venezuela.
India to reduce tariffs on US products to zero?
One of Trump’s early trade actions in his second term was to push reciprocal tariffs on several countries, including India, though some were later suspended. His argument was that these countries enjoyed near-zero tariffs in the US market while imposing high duties on American goods.
He later imposed a 25 per cent reciprocal tariff on India. While India has not announced any new tariffs on US products, it has also not announced any across-the-board reduction. However, Trump’s post claims that New Delhi will “reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO”.
India committed to ‘Buy American’ at a much higher level?
Trump further said PM Modi has agreed to buy more American products in addition to over $500 billion worth of US energy. He said India would also purchase more US technology, coal and agricultural products.
Trump’s reference to agricultural products is significant, as India has repeatedly described the sector as a no-go area in trade negotiations, citing the need to protect domestic farmers.
The announcement of a deal
The announcement came after a phone call between Trump and Prime Minister Narendra Modi. Shortly after Trump’s statement, Modi confirmed the tariff reduction but did not mention any commitments on Russian oil imports, zero tariffs, or a large US purchase package.
More clarity is expected in the coming days, as Gor said a few technical issues will be worked out over the next two to three days.
