In a major breakthrough between India and the US, the US has agreed to reduce tariffs on India. Following a telephonic conversation with US President Donald Trump, Prime Minister Modi announced that the US tariffs on India will now be reduced to 18% from 50%. Earlier Trump imposed 50% tariffs on India in August 2025, which included an additional 25% tariff as punishment for buying Russian oil. Mr. Trump also announced on his social media account that, India and US had agreed to a trade deal. He siad that, India has agreed to stop buying the Russian oil. However, no remarks have been made by the External Affairs Ministry regarding the declaration.
Prime Minister Modi thanked Trump for reducing tariffs and said, “delighted that made in India products will now have reduced tariff of 18%”. Trump also said that, India will buy more from US and Venezuela. India received harshest tariffs for two reasons: 25% penalty for buying Russian oil and another 25% as reciprocal tariffs. The announcement came days after the India-EU FTA deal. Mr. Modi did not mention about concessions on oil purchases. He also did not refer about the US claim of India to stop buying from Russia, nor did he mentione about buying oil from Venezuela.
