U.S. Will Cut Tariffs on India to 18% in Enhanced Trade Agreement

President Donald Trump announced on Feb. 2 that the U.S. and India have reached a trade agreement under which the U.S. has agreed to lower tariffs on India to 18%, with India, in turn, agreeing to end its reliance on Russian oil. The deal is aimed at easing economic tensions between the two countries.

President Trump said that he and Prime Minister Narendra Modi “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%,” in a post on Truth Social.

President Trump added that Modi also agreed to purchase American products “at a much higher level,” following a meeting with the leader.

In August 2025, the Trump administration levied a 25% tariff on the country in response to India’s purchases of, and reliance on, Russian oil. The 25% tariff was placed on top of the “reciprocal” duty that President Trump imposed on the country’s imports that same month.

According to President Trump, India will commit to “stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela.”

Modi confirmed the interaction in a post on X, stating that he was “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.”

As part of the trade agreement, President Trump stated that India “will likewise move forward to reduce their Tariffs and Non-Tariff Barriers against the United States, to ZERO,” while also pledging $500 billion toward U.S. energy and agricultural products.

The agreement between the two nations comes days after India announced a major free trade deal with the European Union.

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