India, US Trade Deal News LIVE: US President Donald Trump announced on Monday, February 2, 2026 that the United States and India have agreed to a long-awaited trade deal, and in return, the Western nation is reducing import tariffs.
Although Trump claimed that India and the US had a trade deal, Indian authorities have not received any official announcement of any bilateral trade agreement, except for an overnight X-Platform address by Indian Prime Minister Narendra Modi, who thanked Trump for his move.
What is the agreement between India and USA?
In his Truth Social post on Monday, Trump announced on Monday that the United States is reducing “reciprocal tariffs” on all Indian imports into the country to 18% effective immediately, compared to its previous 25%.
“Out of friendship and respect for Prime Minister Modi, and at his request, we have agreed to a trade agreement between the United States and India under which the United States will charge a reduced reciprocal tariff, reducing it from 25% to 18%, effective immediately,” Trump said on February 2, 2026.
On behalf of the entire country, Prime Minister Narendra Modi thanked his “dear friend” Donald Trump for reducing reciprocal tariffs to 18%, which was imposed along with other duties in 2025.
“It is wonderful to speak with my dear friend President Trump today. I am delighted that products made in India will now have a reduced tariff of 18%. A big thank you to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi said.
What is India’s trade relationship with the US?
India exports nearly 13.34% of its items to the United States, marking the country as the largest export market for Indian traders, according to data from the Ministry of Commerce and Industry.
While the data by the data agency, India Brand Equity Foundation (IBEF), data showed that bilateral trade between India and the US reached a record $132.2 billion in the financial year ending 2024-25.
What does the trade deal mean for India?
Experts said the India-US trade deal, which is backed by tariffs in both countries, is set to put India in an “export competitive position” amid a wider supply chain recalibration from China.
“The move strengthens India’s export position, boosted by recent tariff rationalization, and comes amid a broader recalibration of the US supply chain from China,” said Rudra Kumar Pandey, partner at Shardul Amarchand Mangaldas & Co.
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