On Monday, US President Donald Trump announced a long‑awaited trade deal between India and the United States. Trump said the US has reduced reciprocal tariffs on Indian goods from 25% to 18%. This has come as a big relief for a developing nation like India.
Trump spoke with Prime Minister Narendra Modi by phone on Monday morning. Later in evening, at about 10:30 pm, Trump announced the trade deal on the social media platform Truth Social. He claimed that Modi had agreed to stop buying oil from Russia and to buy more oil from the United States.
With the new deal in place, India is now among the nations facing one of the lowest tariff rates from the US.
Trump also said India could import oil from Venezuela if needed, and that India would buy more than ₹46 lakh crore ($500 billion) of US goods under the Buy American policy. Following the announcement, Prime Minister Modi wrote on X, “Thank you, President Trump, on behalf of the 1.4 billion people of India.”
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Trump’s Post on Truth Social
Modi’s Post on X
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Trump first imposed a 25% reciprocal tariff on Indian goods in April 2019, and a further 25% penalty in August for India’s purchase of Russian oil. US said that India will now be subject only to the 18% tariff, and the 25% tariff on Russian oil imports will be removed.
India–US Tariff Timeline
- April 2, 2025 – America imposed a 10% baseline tariff on India, marking the beginning of trade tensions.
- April 5, 2025 – In response, the Trump administration announced a 26% tariff on India, escalating tensions further.
- April 9, 2025 – America announced the removal of tariffs for 90 days, signalling temporary relief.
- July 10, 2025 – India submitted a proposal to the World Trade Organization (WTO) for retaliatory duties worth ₹32,000 crore.
- July 31, 2025 – America announced a 25% reciprocal tariff on India.
- August 1, 2025 – The 25% reciprocal tariff on India came into effect.
- August 6, 2025 – Due to India purchasing Russian oil, an additional 25% tariff on India was announced.
- August 27, 2025 – The additional 25% tariff was implemented, taking the total tariff to 50%.
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Tariff on Other Countries
With this announcement, India is now amongst the few countries with the lowest tariffs. The tariff on other countries is as follows:
| Country | Tariff (%) |
|---|---|
| Russia | 50% |
| Brazil | 50% |
| China | 34% |
| South Africa | 30% |
| South Korea | 25% |
| Thailand | 23% |
| Malaysia | 22% |
| Philippines | 21% |
| Bangladesh | 20% |
| Vietnam | 20% |
| Pakistan | 19% |
| Indonesia | 19% |
| India | 18% |
| European Union | 15% |
| Japan | 15% |
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Trade deals of India with other countries
Just last week, India announced a long-awaited trade deal with the European Union, as both governments looked to diversify their markets. India also signed a free-trade agreement with Britain last year, as well as deals with Oman and New Zealand.
India and the European Union (EU) finalised a free trade agreement (FTA) after 18 years of negotiations. The announcement was made during the 16th India-EU Summit. The FTA comes after intense negotiations since the re-launch of negotiations in 2022. Click here to read this trade deal in detail.
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