United States President Donald Trump on Monday said that India and the US had agreed to a trade deal and that he was cutting tariffs imposed on New Delhi to 18% from 25% with immediate effect.
The announcement came after Trump and Prime Minister Narendra Modi spoke on Monday.
The decision to cut the tariffs and the agreement on the trade deal was “out of friendship and respect for Prime Minister Modi” and “as per his request”, Trump said on social media.
US Ambassador to India Sergio Gor told NDTV that the total tariff on New Delhi will be 18%.
“That will be finalised over the next few days,” Gor told NDTV. “There are some items that need to be signed but the total tariff will be at 18%.”
Modi said on social media that he is “delighted that Made in India products will now have a reduced tariff of 18%”.
“When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” Modi said, adding that Trump’s “leadership is vital for global peace, stability and prosperity”.
Modi said that India “fully supports his efforts for peace”.
Indian goods had been facing a combined US tariff rate of 50%, including a punitive levy of 25% imposed in August for buying Russian oil.
On Monday, Trump said that India will “move forward to reduce” its 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,” Trump said. “Our amazing relationship with India will be even stronger going forward.”
US Secretary for Agriculture Brooke Rollins said the new trade deal with lead to more American farm products being exported to Indian markets.
“In 2024, America’s agricultural trade deficit with India was $1.3 billion,” Rollins said. “India’s growing population is an important market for American agricultural products and today’s deal will go a long way to reducing this deficit.”
Trump said that he and Modi had spoken about several matters, including trade and ending Russia’s war on Ukraine.
He said that Modi had 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!” Trump said on social media.
Two days earlier, Trump had told reporters that India will buy oil from Venezuela instead of Iran. This was after the US reportedly told India that it could soon resume purchasing Venezuelan oil to help replace oil imports from Russia.
The punitive tariffs of 25% on India were introduced as part of Trump’s pressure campaign against countries purchasing discounted oil from Russia amid Moscow’s war on Ukraine. The US has claimed that India stopped buying Russian oil after the punitive tariffs were imposed.
However, India had said that the US tariffs are unjustified and has maintained that its oil purchases are guided by the country’s energy security needs.
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