India-US strike major trade deal: US slashes tariffs on Indian goods to 18%

New Delhi: Prime Minister Narendra Modi on Monday hailed a significant breakthrough in India-US economic ties following a telephonic conversation with US President Donald Trump, announcing an immediate reduction in US tariffs on "Made in India" products from 25% to 18%.

In a post on X, PM Modi described the call as "wonderful" and expressed gratitude to President Trump on behalf of India's 1.4 billion people.

"Delighted that Made in India products will now have a reduced tariff of 18%," he wrote, emphasizing that cooperation between the world's two largest democracies unlocks immense opportunities for mutual benefit.

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

Earlier, President Trump, in a detailed announcement on Truth Social, confirmed the trade deal, stating it was reached "out of friendship and respect for Prime Minister Modi and, as per his request." 

He highlighted India's commitments, including halting purchases of Russian oil, increasing imports of US energy, technology, agricultural products, coal, and other goods, potentially exceeding $500 billion, and moving toward zero tariffs and non-tariff barriers on American products.

Trump also linked the energy shift to broader geopolitical goals, suggesting it could help end the Russia-Ukraine conflict by reducing Moscow's oil revenues.

The deal is expected to provide immediate relief to sectors like textiles, pharmaceuticals, electronics, and gems & jewellery.

Official details on the full scope of reciprocal commitments from the Indian side are awaited, but both leaders expressed optimism about elevating the strategic partnership to new heights.

This agreement marks a key step in strengthening bilateral economic relations between the two democracies at a time of shifting global supply chains and energy dynamics.

The development comes amid recent global trade realignments, including India's agreement on a major free trade pact with the European Union. US Ambassador to India Sergio Gor had earlier signaled the leaders' engagement, paving the way for today's announcements.

President Trump just spoke with Prime Minister Modi. STAY TUNED… pic.twitter.com/IFcxrJj04m

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