Prime Minister of India Narendra Modi announced that US tariffs on Indian products had been reduced to 18 percent by Washington, in a breakthrough after months of negotiations between the two nations.
“Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%,” Modi posted Feb. 2, on X.com/narendramodi.
President Trump confirmed the deal with a post on Truth Social that a trade deal had been struck with India and tariffs were being reduced to 18 percent from 25 percent.
In a rapidly developing story of high import to both United States and India, leaders of the two countries appeared to have averted a trade confrontation.
ADVERTISEMENT
President Trump’s post on Truth Social following a call with Modi, said, “t 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,” Trump said, adding, “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.”
The President said that step would help “END THE WAR in Ukraine.”
He went on to add, “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.”
Modi, the President said, “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.”
Washington’s “amazing” relationship with India will be even stronger going forward, the President predicted. “Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most.”The President went on to add that Modi had also committed to buying more than $500 billion dollars products in U.S. energy, technology, agricultural and other sectors.
A White House official told Reuters the Trump administration is dropping the 25% additional tariffs it had previously imposed on Indian imports because of its purchases of Russian oil. In addition, it is lowering a country-specific tariff to 18% from 25 percent.
“We are also dropping the 25% tariff given India’s agreement to stop buying Russian oil,” the official is quoted saying in the Reuters report.
According to Reuters, U.S.-listed shares of major Indian companies rallied on the news about the trade deal mentioned by the two leaders. IT consulting firm Infosys was up 3.53% in afternoon trading, consultancy Wipro rose 7% , HDFC Bank gained 3.4% and the iShares MSCI India exchange-traded fund rallied 3.3%, Reuters reported.
On Saturday, January 31, Trump had broached the idea of a potential deal for India to buy Venezuelan oil after the US seized control over that country.
In August 2025, the Trump administration had doubled duties on imports from India to 50% in a bid to stop New Delhi from purchasing Russian oil, and in January, the President had threatened another rate rise.
Purchases of Venezuelan oil would help replace some of the Russian oil bought by India, the world’s third-biggest oil importer purchasing 90 percent of its needs, Reuters noted.
New Delhi has over the last year been reducing its purchases of Russian oil, particularly after Moscow’s invasion of Ukraine and subsequent sanctions on such purchases by different countries.
“Recently India has begun to slow its purchases from Russia. In January, they were around 1.2 million barrels per day, and are projected to decline to about 1 million bpd in February and 800,000 bpd in March,” according to a Reuters report.
India’s External Affairs Minister S. Jaishankar is expected to be in Washington starting February 3, ostensibly to carry forward discussion on the latest agreement.