The United States and India have reached a new trade agreement that is being seen as a significant development in bilateral relations. Under the deal, the US has reduced import tariffs on Indian goods from 50 per cent to 18 per cent. The decision was taken by US President Donald Trump. Earlier, high tariffs on Indian products had been hurting Indian exporters.
According to PTI, the US had been levying a total tariff of 50 per cent on goods imported from India, which included a 25 per cent standard tariff and an additional 25 per cent surcharge. The extra duty was imposed due to India’s purchase of crude oil from Russia. Under the new agreement, the US has withdrawn this additional levy linked to Russian oil imports, leaving Indian goods subject to an 18 per cent tariff.
India Gains Edge Over Other Countries
Following the latest decision, India’s position has improved compared to several other countries. The US continues to impose tariffs of 37 per cent on China, 50 per cent on Brazil and 30 per cent on South Africa. Bangladesh and Vietnam face a 20 per cent tariff, while Pakistan and Malaysia are subject to a 19 per cent levy.
With lower tariffs, Indian products are expected to become more competitive in the US market, potentially boosting exports.
Impact of Trump–Modi talks
President Trump said on social media platform Truth Social that he had spoken with Prime Minister Narendra Modi. The discussion covered trade as well as the Russia–Ukraine war. According to Trump, India has agreed to reduce its purchase of Russian oil and increase imports from the US.
Reports suggest that India’s imports of Russian crude oil fell to around 1.2 million barrels per day in January 2026.
PM Modi Calls It A Major Achievement
Prime Minister Narendra Modi welcomed the decision, saying it would provide a major boost to “Made in India” products. He said lower tariffs would make Indian companies more competitive in the US market and help generate new employment opportunities.
However, several aspects of the trade deal remain unclear. It is yet to be confirmed when the revised tariff structure will come into effect and which US products India will import in larger quantities. Both governments are expected to release the full framework of the agreement in the coming days.
Overall, the trade deal is being viewed as a major step towards strengthening India’s economy, exports and role in global trade.
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