In a surprise announcement that signals a shift in bilateral trade ties, the United States and India have agreed on a new trade deal aimed at easing tariff pressures and reviving stalled negotiations.
US President Donald Trump said on his social media platform Truth Social that the two countries had reached an agreement to lower reciprocal tariffs. “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,” Trump posted. Under the deal, the US will cut its reciprocal tariff on Indian goods from 25% to 18%.
Prime Minister Narendra Modi responded with a message of appreciation, saying, “Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.”
Both leaders spoke earlier today, though detailed terms were not disclosed at first. The US ambassador to India, Sergio Gor, posted on X asking the public to “stay tuned”. In an exclusive interview with a news channel, Gor confirmed the new rate. “The total tariff will be 18 per cent. And that will be finalised over the next few days. There’s some items that need to be signed, but the total tariff will be at 18 per cent,” he said.
Trump also stated that India would “likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO”.
The announcement follows India’s recent Free Trade Agreement with the European Union, signed after 20 years of talks. The deal, known as the “Mother of all deals”, gives India duty-free access to the EU’s $572.3 billion pharmaceuticals and medical devices market. It is expected to boost the pharma sector, jobs, MSMEs, supply chains, and manufacturing clusters across key states.
The US deal also comes a day after India presented its budget, which included measures to address challenges created by Trump’s earlier 50% tariff on Indian goods. Foreign Minister S Jaishankar has left for the US to attend a ministerial meeting on critical minerals.
Trade talks had slowed after relations worsened in August when Washington imposed a 50% tariff over India’s continued purchase of Russian oil. Talks resumed in September, with further progress in December and January, leading to today’s agreement.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.
