India and the United States have agreed to a much awaited trade deal on Monday. However in the trade deal the US has reduced the reciprocal tariffs between the two countries to 18% from 25%, President Donald Trump said, following a phone call with Prime Minister Narendra Modi.
So how much tariffs will be applicable on India.
India was earlier paying a whopping 50% tariffs that included 25% penalty for buying Russian oil. But now, the tariffs have been slashed to 18% in total as confirmed by US Embassy.
India, US ‘Agreed’ To Trade Deal; Reciprocal Tariffs Slashed To 18%: Trump After Modi Phone Call
The trade deal will be “effective immediately”, Trump said, signalling immediate tariff relief for India.
“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,” he said.
Trump’s statement came shortly after a phone call with Modi.
Notably, the two sides have been locked in negotiations since early 2025, but the talks derailed after the US slapped tariffs as high as 50% on Indian imports in August. After a brief pause, the negotiations resumed in October, but the two countries could not reach the finish line.
Representatives of New Delhi and Washington are engaging in “robust negotiations”, and remain in regular touch as the discussions continue, the persons privy to the development added.
The Modi-Trump phone call also comes days after US Treasury Secretary Scott Bessent signalled that half of the tariffs imposed on India—25% levies—could be waived as India has significantly trimmed its import of Russian crude oil.
“We put 25% tariffs on India for buying Russian oil, and the Indian purchases by their refineries… have collapsed,” Bessent told Politico on the sidelines of World Economic Forum in Davos. “I would imagine there is a path to take them off,” he added.
India-US Trade Deal Inked: Auto To Textile — Here Are The Sectors Set To Benefit From Lower Tariffs
