Key Takeaways
- The US-India trade agreement is a significant step in deepening the US–India economic partnership and advancing a bilateral trade agreement.
- The agreement is expected to bring meaningful benefits for businesses, workers, and consumers in both countries, while also strengthening supply chains and economic resilience.
- The US-India trade partnership is vital not only for economic growth but also for a stable, resilient, and rules-based Indo-Pacific.
Washington: The US-India Strategic Partnership Forum (USISPF) on Tuesday welcomed President Donald Trump’s announcement following his conversation with Prime Minister Narendra Modi, which reaffirmed both leaders’ commitment to deepen the US–India economic partnership and advance a bilateral trade agreement.
The announcement, which includes a reduction of India’s reciprocal tariff from 25 percent to 18 percent, is being seen as a significant first step in negotiations.
The USISPF welcomed the move, stating that it reflects strong political will on both sides to work toward a comprehensive U.S.–India Bilateral Trade Agreement (BTA). This agreement will cover tariffs, market access, non-tariff barriers, and other trade-related issues across multiple sectors, bringing meaningful benefits for businesses, workers, and consumers in both countries.
A full BTA, the forum said, could bring meaningful benefits for businesses, workers, and consumers in both countries, while also strengthening supply chains and economic resilience.
Both governments have indicated that additional phases and negotiations are expected in the coming months.USISPF expressed optimism about the momentum generated by the announcement and reaffirmed its commitment to collaborating with both governments to achieve the shared objective of expanding bilateral trade toward the $500 billion target. The forum added that a stronger US–India trade and investment relationship is vital not only for economic growth but also for a stable, resilient, and rules-based Indo-Pacific.
Trump on Monday unveiled a new trade agreement with India, which significantly reduces tariffs on Indian goods. The deal comes in the context of India’s decision to scale back Russian oil imports, following discussions between Trump and Prime Minister Narendra Modi.
Under the agreement, the United States will lower its reciprocal tariff on Indian imports from 25 per cent to 18 per cent, easing tensions that had previously seen duties rise as high as 50 per cent. A White House official confirmed that the additional punitive tariffs related to India’s Russian oil purchases will be removed, leaving only the new reduced tariff.
Trump shared the announcement on social media after speaking with Modi, stating that the tariff reduction is effective immediately. “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 per cent to 18 per cent,” he wrote on Truth Social.
Prime Minister Narendra Modi announced that the United States will reduce tariffs on Made-in-India products to 18 per cent, calling it a major boost for bilateral trade, following a conversation with US President Donald Trump.
In a post on X, the Prime Minister said he had a “wonderful” conversation with President Trump and thanked him for what he described as a significant step benefiting Indian exporters and consumers.
“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,” PM Modi said.
PM Modi said closer cooperation between India and the United States — the world’s two largest democracies and major global economies — would unlock new opportunities for trade, investment and innovation.
“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 said.
While detailed sector-wise implications of the tariff reduction were not immediately available, the announcement is expected to provide relief to Indian manufacturers and exporters, particularly in sectors that have faced higher duties in the US market in recent years.
The US President also highlighted India’s commitment to increase purchases of American goods, including over $500 billion in energy, technology, agricultural, and other products, while removing tariffs and non-tariff barriers on US exports.
