India-US Trade Deal Seals 18% Tariff Cut, Modi & Trump Hail Historic Pact

According to the trade deal, tariffs on "Made in India" goods will be reduced by 18%.

Shah took to X, posting, "A big day for India-US relations as the trade deal has been locked with a significantly reduced tariff of 18%, paving the way for stronger trade ties and mutual growth. I congratulate PM @narendramodi and President @realDonaldTrump for this historic deal, which will elevate our strategic partnership and greatly benefit both nations and their people. Business between India and US set to flourish further."

PM Modi on Monday said that it was wonderful to speak with his "dear friend President Trump" and expressed delight that Made in India products will now have a reduced tariff of 18%.

"Wonderful to speak with my dear friend President Trump today. 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 in a post on X.

The Prime Minister said that when two large economies and the world's largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.

"President Trump's leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace. I look forward to working closely with him to take our partnership to unprecedented heights," PM Modi said.

India and the European Union (EU) had on January 27 announced the conclusion of negotiations for a Free Trade Agreement (FTA), an important milestone in one of India's most strategic economic partnerships.

The Ministry of Commerce and Industry had said in a release that the FTA responds to contemporary global challenges while enabling deeper market integration between the world's fourth- and second-largest economies.

"With a combined market estimated at over Rs 2091.6 Lakh Crore (USD 24 trillion), bringing unparalleled opportunities for the 2 billion people of India and the EU, the FTA unlocks significant potential for trade and innovation. The FTA delivers unprecedented market access for more than 99 per cent of India's export by trade value, while preserving policy space for sensitive sectors and reinforcing India's developmental priorities," the release said.

President Trump on Monday said he and PM Modi "have 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.

In a post on his social media handle Truth Social, Trump referred to his conversation with Prime Minister Narendra Modi earlier in the day.

Trump said PM Modi was one of his greatest friends and a powerful and respected leader of his country.

Trump also said PM Modi and he are two people that get things done.

He claimed that the Prime Minister had agreed to "stop buying Russian Oil", and to buy much more from the United States.

"It was an Honor to speak with Prime Minister Modi, of India, this morning. He is one of my greatest friends and, a Powerful and Respected Leader of his Country. We spoke about many things, including Trade, and ending the War with Russia and Ukraine," Trump said in his post.

"He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week! 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%," he added.

Trump said India will reduce tariffs and non-tariff Barriers against the United States.

"They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO. The Prime Minister also committed to "BUY AMERICAN," at a much higher level, in addition to over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products. Our amazing relationship with India will be even stronger going forward. Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most. Thank you for your attention to this matter!" Trump added.

India and the US had made significant progress on the trade deal, and there were expectations of the two countries reaching an agreement soon.

- ANI