Trump Announces Reduced 18% Tariffs On India After Telephonic Conversation With PM Modi

New Delhi: US President Donald Trump on Monday announced reduced reciprocal tariffs on India from 25% to 18%, following a phone conversation with Prime Minister Narendra Modi. Trump announced the bilateral trade agreement in a post on Truth Social, ending months of speculations and tussle between the two nations over tariffs, and marking a new beginning in their economic partnership.

Trump revealed the deal on Monday, following a phone conversation with PM Modi, wherein the two leaders agreed to reduce reciprocal tariffs and enhance cooperation in energy, technology, and agriculture. Furthermore, the current additional tariffs, which were imposed due to India's purchase of Russian oil, are also expected to be scrapped.

The agreement, hailed by Trump as an example of the strong friendship between the two leaders, involved the US reducing its tariff on Indian goods from 25% to 18%, effective immediately. In return, India has committed to eliminating its tariffs and non-tariff barriers on US products. "Out of friendship and respect for Prime Minister Modi, and as per his request, we agreed to a trade deal between the United States and India," Trump said in a social media post.

The deal is expected to boost trade between the two nations, with India agreeing to increase its purchases of American goods and services, including energy, technology, and agricultural products, worth over $500 billion. Trump claimed that India has also agreed to stop buying Russian oil and instead buy more from the US and possibly Venezuela, which he believes will help end the war in Ukraine.

India-US Partnership Takes Shape

The trade deal comes amidst a backdrop of global tensions, with the US seeking to counter China's influence and India looking to diversify its energy sources. Prime Minister Modi's government has been under pressure to reduce its dependence on Russian oil, and the deal with the US is seen as an important step in this direction.

In a statement, Trump praised PM Modi as "one of my greatest friends" and said the two leaders had discussed trade, energy cooperation, and the war in Ukraine. "He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week!" Trump wrote.

In a post on Truth Social, Trump wrote: 

"It was an Honor to speak with Prime Minister Modi, of India, this morning. 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. He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week! 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. The Prime Minister also committed to "BUY AMERICAN," at a much higher level, in addition to over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products. Our amazing relationship with India will be even stronger going forward.
Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most. Thank you for your attention to this matter!"

The move is seen as a positive development for India, which has been seeking relief from the punitive tariffs imposed by the US. 

PM Modi Responds With Gratitude

In response to Donald Trump’s announcement, PM Modi, in a post on X, thanked the US President for the trade agreement. The prime minister expressed his gratitude to Donald Trump for reducing tariffs on 'Made in India' products from 25% to 18%. In a post on X, PM Modi said, "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".

Prime Minister Modi outlined the benefits of the trade agreement, stating that it would "unlock immense opportunities for mutually beneficial cooperation" between India and the US. He also praised Trump's leadership, saying it's "vital for global peace, stability, and prosperity". He expressed his enthusiasm to work with Trump to take their partnership to new heights.

In a post on X, PM Modi stated, "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. When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation. 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."

The trade deal is expected to boost India's exports to the US, particularly in sectors like textiles, pharmaceuticals, and engineering goods. As part of the agreement, India will also reduce its tariffs and non-tariff barriers on US goods to zero and commit to buying over $500 billion worth of US products.