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India-US Trade Deal Cuts Tariffs to 18%, Boosting Made-in-India Goods

Finance Minister Nirmala Sitharaman welcomed a new India-US trade deal that reduces tariffs on Indian goods to 18%. The announcement followed a conversation between Prime Minister Narendra Modi and former US President Donald Trump, who framed the cut as a gesture of friendship. As part of the discussed terms, India has agreed to stop purchasing Russian oil and increase imports from the United States. Both leaders expressed optimism that the agreement would benefit the people of both democracies and contribute to ending the war in Ukraine.

Key Points: India-US Trade Deal: Tariffs Cut to 18% on Indian Goods

  • US cuts tariffs on Indian goods from 25% to 18%
  • Deal linked to India ceasing Russian oil purchases
  • Leaders cite mutual friendship and respect
  • Aim to boost bilateral trade and end Ukraine war
3 min read

"Good news for Made-in-India products": FM Nirmala Sitharaman on India-US trade deal

Finance Minister Nirmala Sitharaman welcomes US tariff reduction to 18%, citing benefits for Made-in-India products following Modi-Trump talks.

"Good news for Made In India products. They will now face reduced tariff of 18%. - Nirmala Sitharaman"

New Delhi, February 3

Finance Minister Nirmala Sitharaman on Tuesday welcomed the announcement of the India-United States trade deal under which Washington has reduced tariffs on Indian goods to 18 per cent.

She said the move would benefit Made in India products and people of both democracies.

In a post on X, Sitharaman wrote, "Good news for Made In India products. They will now face reduced tariff of 18%."

"Thanking the leadership of PM @narendramodi and @POTUS for this development. People of our two large democracies stand to benefit," the post read.

This comes after Trump said on Monday that the US and India "have agreed to a trade deal," with Washington reducing the reciprocal tariff from 25 per cent to 18 per cent "out of friendship and respect" for PM Modi.

In his Truth Social post, Trump referred to his conversation with PM Modi earlier in the day, noting that the Prime Minister was one of his closest friends and a powerful, respected leader of India.

The US President also claimed that PM Modi had agreed to "stop buying Russian oil" and to buy much more from the US.

He further noted that India would reduce tariffs and non-tariff barriers against the US.

"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. 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%. They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO," Trump's post read.

Following Trump's post, Prime Minister Modi, on X, said 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 wrote in a post on X.

Meanwhile, a White House official confirmed to ANI that Washington will also drop the additional 25 per cent tariff on Indian imports imposed due to New Delhi's purchase of Russian oil, noting that India has to "cease, not just reduce, Russian oil purchases."

- ANI

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Reader Comments

P
Priya S
Good step, but I hope this isn't a one-sided deal. The report says India will also reduce its tariffs to zero. We must protect our farmers and sensitive sectors. Strategic autonomy in trade is crucial.
R
Rohit P
The part about stopping Russian oil purchases is a big concern. We got cheap oil that helped control inflation. Switching to more expensive US oil will increase petrol prices for common people. The trade benefit should outweigh this cost.
S
Sarah B
As someone working in the handicrafts export sector, this 7% reduction is a game-changer. It directly improves our profit margins and allows us to offer better prices. Hope the procedures are simplified too.
V
Vikram M
Strong diplomacy at work! It's good to see India engaging from a position of strength. The friendship between the leaders seems to have helped, but let's ensure the fine print works for our national interest. Jai Hind!
K
Karthik V
The timing is interesting. Hope this deal is stable and doesn't change after the US elections. Long-term policy certainty is what exporters really need to invest and grow.

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