- US President Trump announced a US-India trade deal cutting tariffs from 25% to 18% on Indian goods
- Trump claimed India agreed to zero tariffs and non-tariff barriers, but New Delhi has not confirmed
- Uncertainty remains over deal details, especially on agriculture sector access and $500 billion US purchases
US President Donald Trump has announced the US-India trade deal, pledging to slash tariffs on Indian goods to 18 per cent from 25 per cent, bringing an end to months of uncertainty. A lot remains unclear about the terms of the deal, but Trump said New Delhi has agreed to several measures, including stopping Russian oil trade, reducing tariffs and non-tariff barriers to "zero", and buying over $500 billion of US goods, including energy, technology, agricultural products, and coal.
In his response, PM Modi hailed the "wonderful" news on tariff reduction in his post on X, but did not mention any of the conditions laid out by the US leader, nor did he give details of the trade deal.
"Delighted that Made in India products will now have a reduced tariff of 18 per cent. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement," PM Modi said.
"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.
What Tariff And Non-Tariff Barriers Mean
Tariff barriers are taxes levied on imported goods, making them more expensive to protect local industries. Non-tariff barriers, meanwhile, are indirect restrictions like quotas, subsidies, licensing, standards, and labelling rules that limit trade without direct taxes, often through complex regulations, costs, or delays, affecting quantity, price, or market access.
Both aim to support domestic economies, but tariffs are explicit taxes, whereas non-tariff barriers use policy and procedures, making them more subtle and complex.
Will India Reduce Trade Barriers To Zero
Trump's claim that India has agreed to "reduce tariffs and non-tariff barriers against the United States, to ZERO", has not been confirmed by New Delhi. Moreover, both parties have not explained on which lines the barriers would be reduced, if at all, to zero.
Largely, Trump's language signifies an in-principle commitment to lower or phase out duties on selected US products rather than an immediate elimination of all import duties.
Points Of Confusion
Analysts have pointed to the lack of clarity on several aspects of the deal, especially the fact that if Trump was referring to a deal over just cutting reciprocal tariffs or to the larger "first tranche" of the India-US Free Trade Agreement (FTA) that has been in talks since PM Modi visited Washington in February 2025. Trump's claim that India would "move forward" to cut its tariffs on US goods to "zero" also left a lot to interpretation.
As part of the India-US FTA, both sides are expected to drop duties, including tariffs and non-tariff barriers, and market access and investments. The negotiations had repeatedly stumbled over India's refusal to expose its politically sensitive agriculture sector to greater US access. India has been reluctant to open agricultural sectors like soybean and dairy.
"We will gain from this deal. But I'm actually worried that there is a bigger picture, and that is not very clear," economist Biswajit Dhar told news agency AFP.
He added that the commitment from the Indian government was that it would not open up agriculture, but Trump's post "gave initial indications that the US was getting access to agriculture."
So far, New Delhi has not publicly confirmed any plan to remove such barriers, raising questions about how far India is prepared to liberalise its trade policy.
Others sought more clarity on the timeline for Trump's claims that New Delhi would ramp up purchases of US energy and tech.
"The headline figure of $500 billion in purchases is unclear," said Ajay Srivastava of the Global Trade Research Initiative, a Delhi-based think tank, in a note.
"India currently imports less than $50 billion a year from the US. This looks more like an aspiration than a commitment. Until there is a joint statement, negotiated text and clarity on enforcement, this should be seen as a political signal -- not a final deal. Caution, not celebration, is needed," he added.
In January, US Commerce Secretary Howard Lutnick had said that a deal had been prepared months ago but couldn't be implemented, as he claimed PM Modi didn't make a telephone call to Trump to clinch it. India had denied the claim.
