A trade deal between India and the US was announced following a phone call between US President Donald Trump and Prime Minister Narendra Modi. Under the agreement, US tariffs on Indian exports have been reduced from 50% to 18%. Indian officials confirm the tariff cut, while Trump claims India will stop buying Russian oil and commit to purchasing $500 billion in US goods.
The India-US trade deal was announced on February 2, 2026, following a phone conversation between Prime Minister Narendra Modi and US President Donald Trump. Trump posted on Truth Social that India agreed to stop buying Russian oil and purchase more from the US and potentially Venezuela, aiding efforts to end the Ukraine war. He stated the US would reduce reciprocal tariffs on Indian goods from 25% to 18%, while India would eliminate its tariffs and non-tariff barriers on US goods to zero. Additionally, Modi committed to buying over $500 billion in US energy, technology, agriculture, coal, and other products.
Modi posted on X: '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.'
Trump said: 'Prime Minister Modi is one of my greatest friends and a powerful leader. We discussed trade and ending the Russia-Ukraine war.'
Indian ministers welcomed the deal. Finance Minister Nirmala Sitharaman called it good news for Made in India. External Affairs Minister S. Jaishankar stated it would create jobs, spur growth, and promote innovation in both economies, strengthening Make in India. Commerce Minister Piyush Goyal said it unlocks opportunities for shared prosperity between two democracies. Home Minister Amit Shah described it as historic.
Congress leader Jairam Ramesh criticized it, saying Modi has finally capitulated and Trump holds leverage over him.
The deal reduces the impact of 50% punitive tariffs imposed in August 2025 due to India's Russian oil purchases. Markets reacted positively, with GIFT Nifty jumping 800 points. US Ambassador Sergio Gor noted the genuine friendship between Trump and Modi, emphasizing limitless potential in bilateral ties.
The agreement benefits export-oriented sectors like pharma, IT, and auto.
