Union Minister Nitin Gadkari on Tuesday lauded Prime Minister Narendra Modi and US President Donald Trump over the announcement of the India-United States trade deal under which Washington has reduced tariffs on Indian goods to 18 per cent, stating that it will further strengthen the trust between both countries and will significantly boost confidence in business, trade, and investment.

Taking it to X, Gadkari stated that the agreement opens new avenues for growth and cooperation between the two countries.

"Today marks a defining step forward in India-US economic relations as the trade deal is finalised with tariffs reduced to 18%, opening new avenues for growth and cooperation. My heartfelt congratulations to PM Narendra Modi and President Donald Trump for their leadership in securing this historic outcome. The agreement strengthens trust, boosts business confidence, and sets the stage for deeper trade, investment, and shared prosperity for both nations," he wrote.

"Self-confidence is that power with the help of which everything is possible.  

This very power of the countrymen will prove extremely useful in realizing the dream of a developed India," PM Modi said in a post on X after announcement of India-US trade deal. 

"A significant milestone ! Under PM Modi's leadership, India continues to strengthen its economic footprint and emerge as a global growth magnet. Stronger India–US ties will continue to drive growth, propel innovation, boost investment, and strengthen prospects of job creation, thereby reinforcing global confidence in Made in India," said former Union Minister Smriti Irani

Leading American and Indian business advocacy groups hailed President Donald Trump's announcement of a breakthrough in US-India trade relations, calling the reduction of tariffs on Indian goods from 50 per cent to 18 per cent a "historic first step".

"We believe this trade deal announcement should lift a key overhang on Indian equities. The U.S. is India's largest trading partner and this helps cement the relationship of the two largest democracies of the world," said Prashant Paroda, Portfolio Manager, Allspring Global. 

"While actual details are awaited, we expect financials, renewables with exposure to the U.S. market and select textile companies to benefit. India has underperformed broader emerging markets index over the last year. Foreign investors who have been net sellers recently might also look to increase their weight to India in light of this announcement," he added.

"We believe the trade deal improves investor sentiment toward India. While the U.S. is India’s largest trading partner, exports to the U.S. account for less than 5% of India’s GDP. Nonetheless, U.S.–India trade frictions have weighed on foreign investor perception. This has been compounded by a global trade focused on AI, which has disproportionately benefited markets such as Taiwan and Korea," said Lakshman Venkitaraman, Associate Portfolio Manager, Wastach Global, Salt Lake City.
"In our view, the trade deal refocuses global investor attention on India and should help revive foreign investor interest in Indian equities. Importantly, domestic investors have remained committed to the India growth story, providing a strong base for renewed foreign inflows," he added. 

 The Indian rupee is set to rally sharply at open on Tuesday, supported by expectations that the U.S.–India trade deal will draw foreign investors back to Indian assets and alleviate hedging activity-related pressure.

The 1-month non-deliverable forward indicated the rupee will open in the 90.15-90.25 range versus the U.S. dollar, having settled at 91.5125 on Monday.

The deal, announced by U.S. President Donald Trump on social media following a call with Prime Minister Narendra Modi, effectively dismantles a punitive tariff regime that had seen duties on Indian goods exports climb to 50%, the highest in Asia.

By removing penalties linked to India's purchase of Russian energy and slashing reciprocal tariffs to 18%, the agreement is expected to encourage a return of foreign capital after record equity outflows in 2025 left the rupee under sustained pressure.

"The trade deal removes a chunk of policy and tariff uncertainty that had been weighing on Indian assets, opening the door for a near-term bounce in the rupee and equities via sentiment and foreign flows," said Marc Velan, head of investments at Lucerne Asset Management in Singapore.

The rupee was the worst-performing Asian currency in 2025, down nearly 5% for the year and more than 2% last month.

India’s External Affairs Minister S. Jaishankar on welcomed the US–India trade deal announced after talks between Prime Minister Narendra Modi and President Donald Trump, calling it a boost for jobs, growth, and innovation in both economies.

The minister arrived in New York on Monday on a three-day official trip to attend the Critical Minerals Ministerial being hosted by his American counterpart, Secretary of State Marco Rubio.

“This will create more jobs, spur growth and promote innovation in both economies,” Jaishankar said in a post on X. He said the agreement would strengthen “Make in India” efforts and encourage trusted technology ties. “A robust economic relationship is the strongest foundation for our strategic partnership,” he added.

"US and India are world’s largest democracies. Both countries are natural allies. Together, India and US have huge potential to work for peace and development," wrote Union Minister Ashwini Vaishnaw in a social media post on X.

"US and India have complementary strengths. Both countries can co-create technologies and co-develop solutions that will benefit the world. Trade deal between US and India will lead to brighter future for both countries. India-US Trade deal is a win-win deal. Citizens and industries of both countries will benefit greatly from this deal," he added.

US and India are world’s largest democracies. Both countries are natural allies. Together, India and US have huge potential to work for peace and development.
US and India have complementary strengths. Both countries can co-create technologies and co-develop solutions that will…

— Ashwini Vaishnaw (@AshwiniVaishnaw) February 2, 2026

Nations that have the lowest tariff agreement with the US include the United Kingdom (10 per cent), the European Union (15 per cent), Switzerland (15 per cent), Japan (15 per cent) and South Korea (15 per cent). 

Some of the countries facing the highest tariffs from the US include Brazil (50 per cent), Myanmar (40 per cent), Laos (40 per cent), China (37 per cent) and South Africa (30 per cent). 

Within Southeast Asia, countries facing higher duties include Vietnam (20 per cent), Bangladesh (20 per cent), Pakistan (19 per cent), Malaysia (19 per cent), Cambodia (19 per cent) and Thailand (19 per cent)

With the new deal in place, India is now among the nations facing one of the lowest tariff rates from the Donald Trump administration compared with other major Asian economies, including China, Pakistan, Indonesia, Bangladesh and Vietnam. However, the duties levied by the US on trade with India are slightly higher than those imposed on its European partners and by Japan and South Korea.

India stands to gain significantly from the India-US trade deal, with reciprocal tariffs slashed from a punitive 50% to 18%, boosting export competitiveness and easing market access to the US. The agreement is expected to revive growth in manufacturing and services, strengthen energy security through diversified oil and gas supplies, create space for domestic economic reforms, and enhance India's global trade and diplomatic standing.

Good news for #MadeInIndia products. They will now face reduced tariff of 18%.
Thanking the leadership of PM @narendramodi and @POTUS for this development.
People of our two large democracies stand to benefit. #IndiaUSRelations

— Nirmala Sitharaman (@nsitharaman) February 3, 2026

A landmark moment for India-US relations as a historic trade deal has been finalised, bringing tariffs down to a significantly lower 18% and opening a new chapter of deeper and greater economic cooperation.
I congratulate Prime Minister @narendramodi and US President…

— Rajnath Singh (@rajnathsingh) February 2, 2026

Industrialist and Chairman of RPG Enterprises Harsh Goenka hailed the India-US trade deal, where Washington reduced the tariffs on India to 18 per cent, describing it as the "Father of all deals".

In a post on X, Harsh Goenka said that this deal was a "great achievement" which came days after the conclusion of the "Mother of all deals" with the European Union, which took place during the state visit of the President of the European Council, Antonio Costa, and the President of the European Commission, Ursula von der Leyen, in India last month.
"First the Mother of all deals with EU, now the Father of all deals with US - great achievement by PM Modi government! Patience pays," the Chairman of RPG Enterprises said.

Maharashtra Chief Minister Devendra Fadnavis lauded the announcement of the India-US trade agreement, referring to it as "a new chapter of friendship" between the two nations.

He added that it would help Maharashtra by providing access to significant investments in cutting-edge technologies, such as artificial intelligence.
Fadnavis took to X, posting, "A New Chapter of Friendship! The historic trade agreement between India and the United States is truly a victory of the friendship between Hon. Prime Minister Narendra Modi ji and the President of the United States, Donald Trump. This is also an extremely important moment for global trade. India will now receive preferential tariff rates from the United States among the world's major exporting economies. This marks the beginning of a new era in India-US friendship."

The United States and India are the world’s largest democracies. Today’s developments in India–US cooperation mark a major leap for our economic future.
With new markets opening up for Made in India products, our youth and farmers will see greater opportunities than ever…

— Nitin Nabin (@NitinNabin) February 2, 2026

Welcome the announcements on bilateral trade following the conversation between PM @narendramodi and President @realDonaldTrump.

This will create more jobs, spur growth and promote innovation in both economies. It will strengthen ‘Make in India’ endeavors and encourage trusted…

— Dr. S. Jaishankar (@DrSJaishankar) February 2, 2026

 The US-India Strategic Partnership Forum (USISPF) on Monday welcomed President Donald Trump's announcement to bring down the reciprocal tariff on Indian goods to 18 per cent from the current 25 per cent, describing it as "an important and positive first step."  India and the US agreed on a trade deal under which Washington will bring down the reciprocal tariff on Indian goods, US President Donald Trump announced on Monday in a Truth Social post after a conversation with Prime Minister Narendra Modi.

"While the agreement's specifics are pending, today's announcement signals strong political will on both sides to move toward a comprehensive US–India Bilateral Trade Agreement (BTA) that addresses tariffs, market access, non-tariff barriers, and other trade-related issues across a wide range of sectors," USISPF said.

A big day for India-US relations as the trade deal has been locked with a significantly reduced tariff of 18%, paving the way for stronger trade ties and mutual growth.
I congratulate PM @narendramodi and President @realDonaldTrump for this historic deal, which will elevate our…

— Amit Shah (@AmitShah) February 2, 2026

Congratulations to Prime Minister @NarendraModi ji and President @RealDonaldTrump, as well as to the people of India and the United States, on the landmark trade agreement. This reflects the power of two like-minded, fair-trading democracies working together for shared…

— Piyush Goyal (@PiyushGoyal) February 2, 2026

A big WIN for a consequential partnership under the leadership of Prime Minister Narendra Modi @narendramodi and President Donald Trump @POTUS
India and USA announce trade deal
creating vast new opportunities for the two economies and the people of our two great nations.… https://t.co/kzuwBm25KX

— Amb Vinay Mohan Kwatra (@AmbVMKwatra) February 2, 2026

Trump's tariff cut announcement after call with PM Modi has acted as a high-octane fuel for the Indian stock indices, with the Nifty futures, or GIFT Nifty, already skyrocketing by over 600 points in overnight trade.

US and India are world’s largest democracies. Both countries are natural allies. Together, India and US have huge potential to work for peace and development.
US and India have complementary strengths. Both countries can co-create technologies and co-develop solutions that will…

— Ashwini Vaishnaw (@AshwiniVaishnaw) February 2, 2026

US tariffs on competing exporting economies:

India 18%

Indonesia 19%

Vietnam 20% 

Bangladesh 20%

China: 34%

US Ambassador to India, Sergio Gor, told NDTV that the total tariff on India will be 18 per cent, which is a 32 per cent cut.

"Tonight is a night of celebration," US Ambassador Sergio Gor To NDTV.

President Trump's announcements come a day after India announced a budget, a part of which is geared at tackling the hurdles created by Trump's 50 per cent tariff on Indian goods.

Trump claimed that India has "agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week!"

"When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation," PM Modi.

Here’s a timeline of events since Trump imposed a 50 per cent tariff on Indian goods being shipped to the US:
2025
April 2: The US imposed a 26 per cent "reciprocal tariff" on several Indian imports under his global "liberation day" tariff actions.
April 10: Trump paused the tariffs for 90 days and maintained a 10 per cent duty on all US imports.
July 31: Trump announced a 25 per cent tariff on all Indian goods and said it would levy a penalty if India continued to buy Russian oil.
August 7: Trump boosted to 50 per cent tariffs on Indian goods being shipped to the US, citing India’s continued purchase of Russian oil. The tariff on Indian goods was the highest among US trade partners.
2026
February 2: Trump announces tariffs reduced from 25 per cent to 18 per cent on Indian goods.

"The reduction of India's reciprocal tariff from 25% to 18% marks an important and positive first step. While the agreement's specifics are pending, today’s announcement signals strong political will on both sides to move toward a comprehensive U.S.–India Bilateral Trade Agreement (BTA) that addresses tariffs, market access, non-tariff barriers, and other trade-related issues across a wide range of sectors. A BTA between the two nations would deliver meaningful benefits for businesses, workers, and consumers in both countries, while strengthening supply chains and economic resilience,"  US India Strategic Partnership Forum said in a statement.

PM Modi and US President held a call before he announced the 'US-India Trade Deal'. "President Trump just spoke with Prime Minister Modi. STAY TUNED…" US Ambassador Sergio Gor posted on X, teasing the announcement.

US President Donald Trump today announced a trade deal with India, and called Prime Minister Narendra Modi "one of my greatest friends". Trump said the US will charge a reduced reciprocal tariff of 18 per cent, down from 25 per cent.

"President Trump’s leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace," PM Modi said in his post thanking Trump for slashing US tariffs.

Wonderful to speak with my dear friend President Trump today. 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.
When two large economies and the…

— Narendra Modi (@narendramodi) February 2, 2026

After Donald Trump announced a trade deal between India and United States, US Ambassador to India, Sergio Gor said that the relationship between both the countries has limitless potential.

"As I have said many times, President Trump genuinely considers Prime Minister Modi a great friend! Thrilled by the news of the trade deal this evening. The relationship between the United States and India has LIMITLESS POTENTIAL," he posted on X.

As I have said many times, President Trump genuinely considers Prime Minister Modi a great friend! Thrilled by the news of the trade deal this evening. The relationship between the United States and India has LIMITLESS POTENTIAL!

— Ambassador Sergio Gor (@USAmbIndia) February 2, 2026

"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," Trump wrote on Truth Social.

US-India Trade Deal Live Updates: US President Donald Trump announced a trade deal between India and the United States on Monday, adding that the US reciprocal tariffs on India would be slashed to 18 per cent.