Trump agrees trade deal with India, slashes reciprocal tariff to 18% after call with Modi
Source: Reuters
United States President Donald Trump announced on Monday that he had agreed to a trade deal with Indian Prime Minister Narendra Modi and slashed reciprocal tariffs for the country to 18% from 25%.
In a post on social media platform Truth Social following a call with Modi., he said: "It was an honour 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. This will help end the war in Ukraine, which is taking place right now, with thousands of people dying each and every week!
"Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a trade deal between the US and India, whereby the US 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 US, to zero. The prime minister also committed to 'buy American' at a much higher level, in addition to over $500 billion dollars of US 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."
A White House official told AFP that an additional 25-percent tariff Trump had slapped on India for its purchase of Russian oil would also be dropped following India's agreement to stop buying it.
The US leader has been pushing New Delhi for months to end its reliance on Russian oil as he seeks a ceasefire in Ukraine, and Trump slapped extra tariffs on India last year.
Modi said it was "wonderful to speak with my dear friend"
He said he was "delighted" that Indian products would now have a reduced tariff of 18%.
"Big thanks to President Trump on behalf of the 1.4b people of India for this wonderful announcement. 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."
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…Trade tensions escalated in August when Trump doubled tariffs on Indian goods to 50%, including a 25% levy in response to India's imports of Russian crude.
However, US Treasury Secretary Scott Bessent last week signalled the potential removal of an additional 25% tariffs on India following a sharp reduction in Indian imports of Russian oil.
The United States is effectively overseeing Venezuelan oil exports since toppling the South American country's leader Nicolas Maduro in a military operation in January.
Trump hit India, the world's most populous nation, with 25% reciprocal levies during his waves of "Liberation Day" tariffs last year.
He then stacked another 25% on top of that over India's purchases of Russian oil.Modi was one of the first leaders to visit the White House after Trump's inauguration for his second term in January 2025, but that has not stopped difficult trade negotiations over the past year.
Trump also said in October that Modi had promised to stop buying Russian oil, but an agreement did not materialise at the time.