US President Donald Trump announced that he had agreed a trade deal with India in which the United States will lower tariffs on Indian goods from 25 per cent to 18 per cent.
In a post on Truth Social, Trump said India would reduce trade barriers to zero and would also stop buying Russian oil. He said an additional 25 per cent tariff penalty imposed because of Delhi’s refusal to halt purchases of Russian oil would be dropped.
The announcement came less than a week after India and the European Union agreed a landmark trade deal after nearly two decades of on-off negotiations.
Modi said on X that he was “delighted” that a deal had been reached.
In his post, Trump said that a morning phone call with Modi had included discussions of trade and the Russia-Ukraine war.
“He agreed to stop buying Russian oil and to buy much more oil from the United States and, potentially, Venezuela,” Trump wrote, adding that the agreement would help to “end” the fighting.
Trump added that, at Modi’s request, he had immediately “agreed to a trade deal” that would see tariffs lowered and India’s tariff and non-tariff barriers reduced to zero.
Additionally, Trump said Modi had committed to buying more than $500 billion (£366 billion) worth of American goods including energy, technology, agriculture and coal products.
The trade relationship between the United States and India had been strained since the United States imposed tariffs on goods from India, including a separate penalty linked to India’s purchase of Russian oil.
A White House official confirmed that the Russian oil-linked tariffs will be dropped as part of the agreement and other tariffs lowered to put the rate at 18 per cent.
“Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi said on X.
“When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” he added.
Indian exports to the United States had fallen sharply as the earlier tariffs took effect.
The trade deal signed by the EU and India last week will see tariffs dropped across a range of goods and services, as well as a joint security partnership.
