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500 billion dollar deal, no Russian oil, 18% tariffs: Inside India-US trade deal
India US trade deal: Trump said US would reduce tariffs on Indian goods to 18 per cent under a new trade deal agreed after his phone call with PM Modi.
US President Donald Trump on Monday announced a new trade deal with India featuring lower reciprocal tariffs and expanded market access, while claiming that New Delhi would halt purchases of Russian oil and sharply increase imports of American goods. India has confirmed the tariff reduction portion of the agreement, with Prime Minister Narendra Modi welcoming the move after a phone call between the two leaders.
Track Live Updates on India US trade deal here
Union minister Ashwini Vaishnaw has also described the agreement as a “win-win” trade deal.
Trump and PM Modi made the India–US trade deal announcement after a phone call on Monday. The breakthrough comes after nearly 12 months of tense negotiations that had strained bilateral ties and saw India facing some of the highest US tariffs globally.
India confirms tariff cut after Trump–Modi call
Prime Minister Narendra Modi said Indian goods will now face a reduced US tariff of 18% following his phone conversation with President Trump. The new rate replaces the earlier 25% reciprocal tariff and is lower than the 19% rate faced by Pakistan.
In a social media post, Modi wrote: “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.”
He added that when “two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”
PM Modi also praised Trump's leadership, saying it was “vital for global peace, stability, and prosperity,” and said he looked forward to working closely with him to take the partnership to “unprecedented heights.”
While Modi’s post confirmed the tariff relief, it did not explicitly mention a trade deal or commitments related to Russian oil purchases or zero tariffs on US goods.
Shortly after, Ashwini Vaishnaw confirmed on X that India and the US had reached a trade deal and called it a “win-win deal” that would benefit citizens and industries of both countries.
India-US trade deal: Sequence of announcements
The first mention of the call came from US Ambassador to India Sergio Gor in a social media post at 9:16 pm. This was followed by a lengthy post by Trump on Truth Social more than an hour later, and then by Modi’s post roughly two hours after that.
Gor said Trump considers Modi a great friend and described the trade deal news as a major boost, adding that the relationship between the two countries has “limitless potential.”
$500 billion purchases, Russian oil halt: Trump's claims
In his Truth Social post, Trump said the agreement goes beyond tariff cuts. He described it as a concluded trade deal under which India would reduce its tariffs and non-tariff barriers against US goods to zero and commit to buying more than $500 billion worth of American energy, technology, agricultural products, coal and other goods.
“It is an honour” to speak with Modi, Trump wrote, calling him one of his “greatest friends” and a “powerful and respected leader.” He said both leaders “are two people that get things done.”
Trump also said India agreed to stop buying Russian oil and instead purchase more energy from the United States and potentially Venezuela, linking the move to efforts to end the Russia–Ukraine war.
“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,” Trump wrote.
He further said India committed to “BUY AMERICAN” at a much higher level, including over $500 billion of US goods and energy.
A White House official told HT that the additional 25% punitive tariff linked to India’s Russian oil purchases would be dropped as part of India’s agreement to cease such imports, bringing the final tariff to 18%.
US officials welcome agreement
US Under Secretary of State Jacob Helberg welcomed the deal, saying it would deepen industrial collaboration and create momentum for specific joint projects, including in critical minerals and technology cooperation. External affairs minister S Jaishankar is expected to attend a critical minerals ministerial dialogue in Washington DC soon.
India–US trade deal: What we know so far
- US reciprocal tariff on Indian goods reduced from 25% to 18%
- PM Modi publicly confirmed the new 18% tariff rate
- Union minister Ashwini Vaishnaw confirmed a concluded trade deal, calling it win-win
- Trump says the trade deal is effective immediately
- Trump claims India will cut tariffs and non-tariff barriers on US goods to zero
- Trump claims India will buy over $500 billion in US goods and energy
- Trump claims India will stop buying Russian oil and shift purchases to US and possibly Venezuela
- White House official says punitive oil-linked tariff will be dropped as part of the arrangement
- PM Modi, Ashwini Vaishnaw and Piyush Goyal's public statements so far confirm tariff relief but not oil or purchase commitments
India-US trade row and tensions
The breakthrough comes almost exactly a year after India and the US launched formal trade talks during Modi’s visit to the US last February. Over the past year, the two sides held six formal rounds of negotiations and multiple informal consultations. A delegation led by the deputy US trade representative visited India in December 2025.
Before this announcement, trade ties had come under strain after Washington imposed 50% tariffs on Indian goods, including a 25% punitive levy linked to Russian oil purchases. Other friction points included immigration rules, defence and energy ties with Russia, and Trump’s past claims about mediating an India–Pakistan ceasefire.
No detailed text of the trade agreement has yet been released. The announcement also comes days after India and the European Union sealed a separate trade pact described by both sides as the “mother of all deals.”
