New Delhi, February 3, 2026 : The United States has announced a reduction in tariffs on Indian exports following a telephone conversation between U.S. President Donald Trump and Prime Minister Narendra Modi, easing recent trade frictions and signaling a reset in bilateral economic engagement.
President Trump said reciprocal tariffs on Indian goods would be lowered from 25 per cent to 18 per cent with immediate effect. The move also involves the withdrawal of an additional punitive duty imposed earlier, reducing the effective tariff burden from levels that had peaked near 50 per cent.
According to statements from the U.S. side, the discussion between the two leaders focused on recalibrating trade ties and addressing broader strategic concerns. President Trump said India had agreed in principle to reduce its tariffs and non-tariff barriers on American products over time. However, no formal timeline or official documentation outlining such measures has been released by New Delhi.
The U.S. president also claimed that India would shift away from purchasing Russian crude oil and increase energy imports from the United States and other suppliers. Indian authorities have not publicly confirmed any decision to halt Russian oil procurement.
Prime Minister Modi welcomed the tariff reduction, stating that the revised 18 per cent rate would benefit Indian manufacturers and exporters. He underscored the importance of cooperation between the two countries, describing the engagement as a step toward strengthening economic ties between the world’s two largest democracies.
President Trump further indicated that India is expected to significantly expand purchases of American energy, agricultural products, coal, and technology in the coming years. Estimates cited by U.S. officials suggest these transactions could cumulatively exceed 500 billion dollars, though the figure has not been formally endorsed by Indian officials.
The announcement coincided with External Affairs Minister S. Jaishankar’s visit to Washington for discussions on critical minerals and supply chains, adding to expectations of deeper strategic coordination.
With the revised tariff rate, Indian exports now face lower duties than some regional competitors. Current U.S. tariffs on Indonesian and Vietnamese goods stand at around 19 per cent and 20 per cent respectively, while Chinese exports continue to attract substantially higher tariffs.
The development comes shortly after India concluded a separate trade agreement with the European Union, highlighting a broader push to recalibrate its global trade partnerships amid shifting geopolitical and economic conditions.
