Prime Minister Narendra Modi said on Monday that Indian exports to the United States will now face a lower tariff of 18%. He shared the update after a phone call with US President Donald Trump. Trump said both countries had finalised a trade deal. Under the deal, India will reduce its tariffs to zero and buy American goods worth more than $500 billion, including energy.
The decision ends nearly 12 months of strained negotiations. During this period, trade ties weakened. The US also imposed some of its highest tariffs on Indian products.
Timeline Of The Announcement
US Ambassador Sergio Gor first spoke about the phone call on social media at 9.16 pm. More than an hour later, Trump posted a long message on Truth Social. Almost two hours after that, Modi shared his post 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,” Modi said on X.
He added, “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 did not directly mention a trade deal. Later, Union minister Ashwini Vaishnaw confirmed that India and the US had reached an agreement. He called it a “win win”.
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.
— Narendra Modi (@narendramodi) February 2, 2026
When two large economies and the…
Trump Highlights Trade And Energy Commitments
Trump said it was “an honour” to speak with Modi. He called the Indian leader one of his “greatest friends”. He praised Modi as a strong and respected leader.
“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,” Trump said.
Trump claimed that India agreed to stop buying Russian oil. He said India would instead buy more US energy and technology. He also said India committed to purchases worth over $500 billion.
Tariffs To Fall From 25% To 18%
Trump said the US will immediately cut its reciprocal tariff on Indian goods from 25% to 18%. He added that India will reduce its tariffs and non-tariff barriers against the US to zero.
“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 said.
Trump also said India committed to “BUY AMERICAN” at a much higher level.
A White House official later confirmed that the remaining 25% tariff would be dropped. This move followed India’s agreement to stop buying Russian oil. “Final tariff will be 18%,” the official said.
The new rate is lower than the 19% tariff faced by Pakistan.
Modi Praises Trump’s Global Role
Modi also spoke positively about Trump’s leadership.
“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,” Modi said.
Talks Began One Year Ago
India and the US launched trade talks during Modi’s visit to the US last February. Since then, both sides held six formal rounds of talks. They also held several informal consultations.
In December 2025, a US delegation led by Deputy US Trade Representative Rick Switzer visited India to push discussions forward.
Progress slowed after Trump imposed 50% tariffs on Indian goods. This included a 25% punitive levy.
US Officials Welcome The Deal
Under Secretary of State Jacob Helberg welcomed the agreement. He said it would boost cooperation.
“We’re excited that the successful conclusion of the deal actually creates and adds a lot of positive momentum to actually deepening our industrial collaboration,” Helberg told HT.
He added, “We think that now that the trade deal is finalised, it will actually help create a lot of momentum and free up a lot of political oxygen that can be channeled towards specific, tactical projects.”
External affairs minister S Jaishankar is expected to attend a key critical minerals dialogue in Washington DC.
Vaishnaw Calls Deal A Win For Both Sides
Ashwini Vaishnaw said India and the US are “natural allies”.
“US and India have complementary strengths. Both countries can co-create technologies and co-develop solutions that will benefit the world. Trade deal between US and India will lead to brighter future for both countries. India-US Trade deal is a win-win deal. Citizens and industries of both countries will benefit greatly from this deal,” he said.
US Ambassador Sergio Gor also welcomed the development.
“As I have said many times, President Trump genuinely considers Prime Minister Modi a great friend! Thrilled by the news of the trade deal this evening. The relationship between the United States and India has LIMITLESS POTENTIAL!” he posted.
Broader Context And Open Questions
Officials have not released detailed terms of the deal yet. The announcement came days after India and the European Union signed a major trade pact.
Earlier on Monday, Trump posted a photo of India Gate. “India’s beautiful Triumphal Arch. Ours will be the greatest of them all!” he said. He also shared a magazine cover featuring him and Modi.
Before this call, the two leaders last spoke in October 2025. Relations had also suffered due to US immigration rules and criticism of India’s ties with Russia.
India has said its energy purchases depend on market conditions and energy security needs. Russian oil imports had already declined in recent months.