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US and India reach deal to reduce tariffs to 18%

Feb 5, 2026 United States

US President Donald Trump announced a trade deal with India, which will see tariffs on Indian goods cut from from 50% to 18%, linking the move to India halting Russian oil purchases and lowering trade barriers

The deal was announced on Monday on the Truth Social network following a call with Indian Prime Minister Narendra Modi, during which Trump claimed that India’s prime minister, Narendra Modi, had agreed to stop buying Russian oil and instead purchase more from the United States and potentially from Venezuela.

Since late August, India has had the highest tariffs in the world after Trump increased import duties on Indian goods from 25% to 50% in August last year. This was in response to India’s purchase of discounted Russian oil, which Trump said was funding Russia’s war in Ukraine.

A White House official later confirmed that the US was rescinding a punitive 25% tariff on all imports from India due to its purchases of Russian oil, which was in addition to a 25% ‘reciprocal’ tariff.

According to Donald Trump, Modi also committed India to buying American products “at a much higher level”, as well as purchasing more than 500 billion US dollars’ worth of US energy products, including coal, technology and agricultural produce.

However, the details of the agreement are not yet know, and India’s prime minister simply confirmed that “Made in India products will now have a reduced tariff of 18%,” expressing his gratitude over “this wonderful announcement”.

Today (5^th of February 2026), India' Commerce Minister Piyush Goyal announced that a joint statement would be released within the next 4 to 5 days as the “first tranche” of a larger Bilateral Trade Agreement.

Image Credits: economictimes.indiatimes.com

India United States Economy International Trade Tariffs Trump tariffs