Trump said the tariff reduction was made out of “friendship and respect” for PM Modi, adding that the long-pending trade deal is now on track despite earlier disagreements over market access, particularly in India’s agriculture sector.
BY PC Bureau
New Delhi, February 2, 2026 — U.S. President Donald Trump on Monday announced a breakthrough trade agreement with India, reducing reciprocal tariffs on Indian exports from 25 per cent to 18 per cent following a telephone conversation with Prime Minister Narendra Modi. The move signals a thaw in bilateral trade ties that had remained strained over tariff disputes.
However, an additional 25 per cent tariff on certain Indian exports to the United States will continue to remain in place.
In a post on his social media platform Truth Social, Trump said the tariff cut was made “out of friendship and respect” for Prime Minister Modi, describing it as a goodwill gesture following their discussions.
Trump announces US-India trade deal
US tariffs drop from 25% to 18% and India cuts tariffs and barriers to zero.Bullish news 👀
End the war!. pic.twitter.com/rziZR0rCKd— Dave (@splendor_16) February 2, 2026
“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% to 18%,” Trump wrote.
Responding to Trump’s announcement, Prime Minister Modi welcomed the development, stating that “Made in India” products would now attract the reduced 18 per cent tariff.
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“Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi tweeted.
The announcement also sheds light on the long-pending US-India trade agreement, which had faced repeated roadblocks, particularly over New Delhi’s refusal to open its agriculture sector to American imports. Trump said that an agreement was finally on the cards after extensive negotiations.
During the call, Trump further claimed that Prime Minister Modi had agreed to halt India’s purchases of Russian oil and divert energy imports toward the United States and Venezuela — a move he said would help accelerate efforts to end the war in Ukraine.
“This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week,” Trump wrote, adding that India would also work to reduce its tariff and non-tariff barriers against American goods to zero.
Trump described his conversation with Modi as productive and cordial, calling him “one of my greatest friends and a powerful and respected leader.” He added that both leaders discussed a wide range of issues, including trade, energy cooperation, and geopolitical stability.
The US President further claimed that Modi had committed to purchasing more than $500 billion worth of American energy, technology, agricultural products, coal, and other goods, underscoring the scale of the proposed economic partnership.
“Prime Minister Modi and I are two people that get things done,” Trump said.
The announcement has sparked widespread interest across political and business circles, with analysts viewing it as a potentially transformative step for US-India economic relations amid shifting global trade and geopolitical dynamics.
