New Delhi: President Donald Trump Monday announced the conclusion of negotiations on an India-US trade deal, while Prime Minister Narendra Modi confirmed that Indian exports will be tariffed at “18 percent” after the two leaders spoke on call.
Modi makes no mention of any trade deal in his statement.
Trump has claimed that New Delhi will cut all tariffs on American goods to zero and purchase over $500 billion worth of energy, agriculture, coal and technology from Washington, in exchange for the tariff relief. Indian goods are currently tariffed at 50 per cent.
“It was an Honor to speak with Prime Minister Modi, of India, this morning. 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 (sic),” Trump said in a statement on the social media platform Truth Social.
He added: “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 (sic).”
Modi meanwhile wrote on X, “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.”
The PM further credited the US President’s leadership as “vital for global peace, stability and prosperity,” announcing New Delhi’s support for Trump’s peace efforts.
According to the US President, Modi “committed” to “BUY AMERICAN” at a higher level, in addition to $500 billion worth of goods in sectors such as energy, technology, agriculture, coal and “many other products.”
Hours before the call, Trump posted an image of India Gate in New Delhi on his social media platform. If the details shared by Trump are true, it marks a significant shift in Indian trade policy, as New Delhi has maintained that any trade deal with a foreign country will exclude agriculture and dairy products.
India’s largest trade deal, the recently concluded negotiations with the European Union (EU) sees New Delhi open a number of markets to European products, while keeping agriculture and dairy outside the scope of the deal. Trump has announced that India will reduce all tariff barriers on the US to “zero” while adding that New Delhi will increase its purchase of American agricultural goods.
India and the US have seen a chill in ties over the last half year, as Trump imposed tariffs of up to 50 per cent on Indian merchandise exports. Half of the tariffs introduced was a penalty for India’s large purchases of Russian oil.
India has maintained that it purchases oil based on the prevailing market conditions, while trade data shows Russian oil purchases have dipped in the last four months. Furthermore, the US President took credit for mediating an end to the India – Pakistan conflict last May, a claim New Delhi has consistently denied.
The US is India’s largest export market, with merchandise exports touching $86 billion in the last financial year. India has maintained a trade surplus with the US, in the range of $30 to $40 billion in the recent past.
Trade negotiations stalled last year, over agriculture and dairy, given India’s redlines in these sectors. External Affairs Minister S. Jaishankar departed for the US Monday to attend a critical minerals ministerial convened by Secretary of State Marco Rubio.
Jaishankar was expected to discuss trade and tariffs during his bilateral meeting with Rubio. The two had spoken last month. The diplomatic chill at the political level has led to Modi and Trump not having a bilateral meeting in almost a year. The two last met in Washington in February 2025.
(Edited by Gitanjali Das)
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