Trump lowers Indian tariffs after deal reached
Donald Trump says the US and India have reached a trade deal, which will immediately lower reciprocal tariffs between the two nations.
Following a call with India prime minister Narendra Modi, the US president wrote in a post on Truth Social yesterday (2 February): “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 50% 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 US$500 billion of US 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.”
In August, Trump placed a 25% tariff on India in response to the country’s oil purchases from Russia. This was slapped on top of the 25% ‘reciprocal’ levy on the country’s US-bound goods that had taken effect earlier the same month.
Trump claims India has agreed to stop buying Russian oil, “and to buy much more from the United States and, potentially, Venezuela.”
The 18% tariff brings India closer in line with its peers in Asia, such as Vietnam, Thailand and Bangladesh, who pay duties between 19% and 40% on US exports.
Modi confirmed the reduction in US tariffs in a post on X late yesterday.
“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,” he wrote.
“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.”
Although the deal is said to be effective immediately, specific terms have not been officially published, including which products are covered.
Currently, US spirits exports to India are dominated by Bourbon. In 2024, India was the 23rd biggest export market for American whiskeys, with a value of US$8.8 million.
In February 2025, India reduced its 150% tariff on Bourbon to 100%, aiming to increase access for US distillers.
The new agreement has come a week after India closed a major free trade agreement with the EU.
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