US President Donald Trump on Monday announced a trade agreement with India, ending months of tariff escalation that had pushed duties on Indian goods as
high as 50 per cent. The announcement, made on Trump’s Truth Social platform, said Washington would cut reciprocal tariffs on Indian exports to 18 per cent and claimed India had agreed to lower barriers on US goods and halt Russian oil imports. Prime Minister Narendra Modi welcomed the tariff cut as a boost for “Made in India” products, though New Delhi has not commented on the oil-related claims. The deal caps a long and often turbulent negotiating process. Here’s how it unfolded: February 13, 2025 | The ambition is set Modi and Trump agreed to deepen economic ties, setting an ambitious target of more than doubling bilateral trade to $500 billion by 2030. Both sides committed to negotiating the first tranche of a multi-sector Bilateral Trade Agreement by fall 2025. March–April 2025 | Talks begin — then stall Commerce Minister Piyush Goyal held multiple rounds of talks in Washington with US trade officials. Momentum was disrupted on April 2 when Trump imposed a 26 per cent import duty on Indian goods. Although the tariff was suspended for 90 days on April 9, uncertainty crept into negotiations. April–June 2025 | Formal talks take shape India’s chief negotiator Rajesh Agrawal led delegations to Washington, while a US team visited India. Both sides agreed on a broad framework covering 19 chapters, including tariffs, market access, digital trade and regulatory barriers. June 2025 | Deadline pressure mounts As the July 9 tariff deadline loomed, India dispatched another delegation to bridge differences. Trump publicly hinted at a “very big” deal with India, signalling political intent even as negotiations remained difficult. July–August 2025 | Tariff escalation On July 31, the US imposed a 25 per cent duty on Indian goods, followed days later by an additional 25 per cent penalty linked to India’s continued purchase of Russian oil. Effective tariffs on many Indian exports jumped to 50 per cent, sharply raising the stakes. September–December 2025 | Backchannel push to salvage talks After months of escalation, negotiators returned to the table. US trade officials visited India in September, followed by senior-level engagements in New York and Washington. By December, six formal rounds of talks had been completed, helping narrow key differences. February 2026 | The deal is sealed In January, both sides signalled renewed momentum, with Goyal describing the negotiations as nearing the “father of all deals.” On February 2, following a phone call with Modi, Trump announced that the US would slash tariffs on Indian goods to 18 per cent — bringing an end to months of tariff shock and sealing the long-awaited agreement. The US–India trade pact marks a clear turning point after a year of tariff shocks, brinkmanship and stop-start negotiations. By cutting US tariffs on Indian exports to 18 per cent, the deal removes a major overhang on bilateral trade and restores predictability for exporters and investors on both sides. At the same time, unanswered questions—particularly around market access, sector-specific tariffs and energy commitments—underscore that this agreement is as much a political breakthrough as a commercial one. Its real impact will ultimately depend on how quickly the broad understanding is translated into detailed, enforceable commitments and whether both countries can sustain momentum toward the larger goal of a deeper, long-term economic partnership.
