President Donald Trump announced that the U.S.–India trade deal has been finalized, with both countries agreeing to immediately lower tariffs on each other’s goods. The announcement followed a direct phone call between Trump and Indian Prime Minister Narendra Modi, signaling renewed momentum in bilateral economic relations between the two nations.
Tariffs Reduced as Trade Ties Strengthen
Under the U.S.–India trade deal, the United States will reduce its reciprocal tariff on Indian goods from 25 percent to 18 percent, effective immediately. Trump stated that India has also committed to cutting its tariffs and non-tariff barriers on U.S. products to zero, marking a significant breakthrough after months of stalled negotiations.
India Commits to Buying More American Goods
As part of the U.S.–India trade deal, Prime Minister Modi agreed to sharply increase purchases of American products. According to Trump, India will buy over $500 billion worth of U.S. energy, technology, agricultural products, coal, and other goods, strengthening U.S. exports and deepening economic cooperation.
Shift Away From Russian Oil Highlighted
Trump also said Modi committed to reducing India’s reliance on Russian oil and instead buying more energy from the United States and potentially Venezuela. This move, linked to the broader U.S.–India trade deal, was framed by Trump as a step that could help ease geopolitical tensions and support efforts to end the war between Russia and Ukraine.
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Deal Announced, Details Still Awaited
While Trump emphasized that the U.S.–India trade deal takes effect without delay, formal documentation has yet to be released. Neither the White House nor the Office of the U.S. Trade Representative immediately confirmed whether a binding agreement has been signed, raising questions about the legal status of the deal.
Legal Questions and Market Caution
Some legal experts and Democratic lawmakers have questioned whether the president can finalize binding trade agreements without congressional approval. However, Trump and his allies argue that prior congressional actions have granted the executive branch authority to pursue such agreements. Trade professionals caution that markets typically wait for official notices before recognizing changes under a U.S.–India trade deal.
Modi Confirms Tariff Reduction
Prime Minister Modi later confirmed the tariff cut, welcoming the reduced 18 percent rate on Indian exports. He described the U.S.–India trade deal as a win for both nations and emphasized that cooperation between the world’s two largest democracies creates economic opportunity, global stability, and long-term prosperity.
Trade Momentum Builds After EU Agreement
Trump’s announcement comes shortly after India concluded a major free trade agreement with the European Union. Analysts suggest that this momentum helped accelerate progress on the U.S.–India trade deal, reviving talks that had stalled last year due to disagreements over tariffs and India’s oil purchases from Russia.
