India-US trade deal news: India and the United States have announced a new trade deal aimed at sharply reducing US tariffs on Indian goods following a call between Donald Trump and Narendra Modi. While New Delhi has formally confirmed the tariff relief, several of the US president’s broader claims — from the purchase of Russian oil to a $500 billion purchase commitment — remain unverified by the Indian side.
Tariff cuts under new India-US trade deal
US President Donald Trump said on Monday that he and Prime Minister Narendra Modi had “agreed on a trade deal” between the United States and India that would see Washington DC apply a reduced reciprocal tariff of 18 percent from 25 percent.
India has since confirmed the tariff reduction, with Prime Minister Modi publicly welcoming the move after the call. The revised rate represents a significant easing of trade pressure after months of increased tariffs on Indian exports.
What’s changed: The removal of the Russian oil penalty
The earlier 50% tax on Indian goods consisted of two parts: a 25% reciprocal duty and another 25% import duty imposed on India’s purchase of Russian oil.
Under the new arrangement, the United States removed punitive tariffs on Russian oil imports and reduced the remaining reciprocal tariffs, bringing the overall rate down to 18 percent. A White House official told Reuters that only the revised reciprocal tariff will now apply.
Competitive edge for Indian exports
The revised tariff structure gives India a relative advantage over several competing export economies in the region. Its tariff rate is now lower than that applied to Indonesia, Bangladesh and Vietnam.
Compared to China and Pakistan, Indian exports face significantly reduced US tariffs, which could strengthen India’s position in key global supply chains.
$500 billion purchases and oil claims: What Trump said
In a post on his Truth Social platform, President Trump outlined what he described as a broader package to accompany the tariff cuts. He argued that India would:
Reduce tariffs and non-tariff barriers on American goods to zero
Commit to buying more than $500 billion in American energy, technology, agricultural products, coal and other goods
Stop buying Russian oil and shift energy purchases to the United States and potentially Venezuela, linking the move to efforts to end the war between Russia and Ukraine
What India has—and hasn’t—confirmed
While India has officially acknowledged the reduction in US tariffs, it has not publicly confirmed some of the elements outlined by President Trump.
These include claims to halt purchases of Russian oil, remove all tariffs and non-tariff barriers on American goods, or any commitment to buy $500 billion worth of American products.
Prime Minister Modi’s public statement focused only on tariff relief and did not mention oil imports or large-scale commitments.
India-US trade deal: What we know so far
- The US will reduce reciprocal tariffs on Indian goods from 25 percent to 18 percent
- Prime Minister Modi confirmed the 18 percent tariff
- President Trump says the trade deal is effective immediately
- Trump says India will buy more than $500 billion worth of American goods
- Trump says India will reduce tariffs and non-tariff barriers to zero
- Trump says India will stop buying Russian oil and shift purchases to the US and possibly Venezuela
- India confirmed tariff exemptions but not oil or procurement commitments
Context: From trade tensions to recovery between India and the US
The announcement follows a period of strained trade relations between India and the US after Washington imposed 50 percent tariffs on Indian goods last year, including an additional duty linked to purchases of Russian oil. The latest deal signals a partial reset, easing tariff pressures while leaving open questions about the broader strategic and economic commitments the US president is claiming.