‘Important & Positive First Step’: USISPF Welcomes US-India Trade Agreement

New Delhi: The US-India Strategic Partnership Forum (USISPF) on Tuesday welcomed the latest trade agreement between India and the United States, describing Washington’s decision to lower reciprocal tariffs on Indian goods as “an important and positive first step” towards a broader bilateral trade pact.

In a statement issued from Washington, DC, USISPF said the reduction of India’s reciprocal tariff from 25 per cent to 18 per cent reflects growing political momentum on both sides to deepen economic ties and advance a comprehensive US-India Bilateral Trade Agreement (BTA).

The development comes after US President Donald Trump announced the tariff cut in a post on Truth Social following a conversation with Prime Minister Narendra Modi. Trump said the two leaders had agreed on a trade deal that would ease tariff barriers and strengthen bilateral commerce.

“While the agreement’s specifics are pending, today’s announcement signals strong political will on both sides to move toward a comprehensive US-India Bilateral Trade Agreement that addresses tariffs, market access, non-tariff barriers, and other trade-related issues across a wide range of sectors,” USISPF said in a post on X.

The forum noted that a full-fledged BTA would deliver meaningful benefits for businesses, workers and consumers in both countries, while also strengthening supply chains and economic resilience.

USISPF added that both governments have made it clear that the current agreement marks only the beginning, with further negotiations and additional phases expected in the coming months. The organisation said it was encouraged by the “constructive momentum” generated by the announcement and remained optimistic about the scope and ambition of future talks.

Reiterating its commitment to closer engagement, USISPF said it would continue working with the governments of India and the United States to advance the shared objective of expanding bilateral trade towards the $500-billion target. A stronger US-India trade and investment relationship, it added, is critical not only for both economies but also for promoting a stable, resilient and rules-based Indo-Pacific.

Trump on Monday said he had agreed on a trade deal with India, and that New Delhi also agreed to stop buying Russian oil and buy more from the US and potentially Venezuela.

Why India-US Ties Deteriorated?

Between April and August of 2025, Trump surprised India by imposing a tariff of 25% initially on goods shipped to the US. The US followed up with another 25% tariff, citing India's purchase of Russian oil. The tariff moves pushed duties on most Indian goods shipped to the US to 50% and drove relations between the two countries to a historic low. India called the actions by Trump unfair.

By mid-2025, prospects for a US-India bilateral trade agreement deteriorated, with negotiations stalling amid heightened tensions. By then, Trump had closed larger deals with Japan and the EU, and offered better terms even to Indian arch rival Pakistan. Trump's repeated remarks about mediating the India-Pakistan conflict further strained negotiations and contributed to PM Modi delaying calls and meetings with Trump.

Modi declined an invitation from Trump to visit Washington after the G7 meeting in Canada in June. Modi said in a speech that he would protect the interests of farmers, hinting that talks failed over disagreements in the politically sensitive agriculture sector. India pivoted to improving its relationship with China and struck a landmark trade deal with the European Union.

Back On Track

In his Truth Social post on Monday, Trump referred to his conversation with PM Modi earlier in the day, noting that the Prime Minister was one of his closest friends and a powerful, respected leader of India.

Following Trump's post, PM Modi, on X, said it was wonderful to speak with his "dear friend President Trump" and expressed delight that "Made in India products will now have a reduced tariff of 18%".

"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," PM Modi wrote in a post on X.

ALSO READ: Dalal Street Roars As India-US Deal Sparks Record Rally, Sensex Surges Over 3,600 Points; Nifty Jumps 4.8%