New Delhi/Washington: India and the United States have announced a new trade agreement that lowers US reciprocal tariffs on Indian goods from 25 per cent to 18 per cent, a move expected to strengthen bilateral economic ties and give Indian exporters a competitive edge over rivals in the region. The decision followed a phone conversation between Prime Minister Narendra Modi and US President Donald Trump, with the agreement coming into effect immediately.
External Affairs Minister S Jaishankar welcomed the development, calling it a boost for growth, innovation and job creation in both countries. Posting on X, he said the deal would strengthen the “Make in India” programme and encourage trusted technology partnerships, adding that a robust economic relationship is the strongest foundation for the India-US strategic partnership. Jaishankar is currently in Washington for talks on critical minerals supply chains, underlining the broader push to deepen cooperation in emerging sectors.
Prime Minister Modi thanked President Trump for the tariff cut, saying the move would help “Made in India” products gain better access to the US market and unlock immense opportunities for mutually beneficial cooperation. He said stronger economic engagement between the world’s two largest democracies would benefit people in both countries.
President Trump said the agreement reflected his personal rapport with the Indian prime minister and claimed India would move to reduce tariffs and non-tariff barriers on American goods. He also said New Delhi would significantly increase purchases of US energy, technology, agricultural products and other goods, including large volumes of oil and gas. The US president further linked the energy shift to efforts to reduce India’s reliance on Russian oil.
Officials noted that the revised tariff rate gives India an advantage over competing export economies, with US tariffs remaining higher on countries such as Indonesia, Vietnam, Bangladesh and China. Markets reacted positively to the announcement, with equities rising and the rupee strengthening, reflecting investor optimism about improved trade flows and deeper economic cooperation between India and the US.
