Trump Says Trade Deal With India Done, Cuts Tariffs To 18%

US President Donald Trump - in a post in his social media account Truth Social -- has announced that India and the US have "agreed to a Trade Deal" under which the US will cut reciprocal tariff from 25 per cent to 18 per cent. His post was followed by one from Prime Minister Narendra Modi, who conveyed his "Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement".

The two leaders have spoken this morning and while the details were not disclosed initially by either government, US ambassador to India Sergio Gor said in a post on X to "stay tuned".

Gor has confirmed to NDTV in an exclusive interview today that the total tariff imposed by the US on Indian goods will now stand at 18 per cent. "The total tariff will be 18 per cent. And that will be finalised over the next few days. There's some items that need to be signed, but the total tariff will be at 18 per cent," Gor said.

"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 25% to 18%," Trump's post read. 

India, he declared, will "likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO". 

Trump also 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!"

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

The Timing

President Trump's announcement comes shortly after India signed a major Free Trade Agreement  with the European Union, which is seen to have increased the pressure on the US to finalise the trade deal. 

The deal -- dubbed "Mother of all deals" and signed after 20 years of negotiations -- gives India sweeping duty-free access to the European Union's $572.3 billion pharmaceuticals and medical devices market, boosting India's pharma sector, employment, MSMEs and global supply chain integration. 

It will also drive domestic capacity expansion, encourage MSME participation, and support industrial clusters across key manufacturing state.

The deal -- and the tariff cut -- also 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. Foreign minister S Jaishankar has left for the US to attend a ministerial meet on critical minerals. 

A Rocky Road

The trade deal with the US had noticeably slowed down since India-US relations took a sharp downturn in August following Washington's imposition of 50 per cent tariff on India over New Delhi's continued purchase of Russian oil. 

The impasse ended and the deal was reached after months of negotiations by both sides. 

The reset came in September when Trump said he had hopes that the matter would be resolved soon. In December, the two leaders spoke on telephone and reviewed progress in the India-US partnership. 

While there was no word on the trade deal,  they acknowledged discussion on expanding cooperation in key areas, including critical technologies, energy, defence, security and trade.

In January, Sergio Gor announced that the countries are inching closer to a trade agreement.