In a major boost to India-US trade ties, the United States has agreed to reduce the reciprocal tariff it imposes on India from 50% to 18%. This comes after a phone conversation between US President Donald Trump and Prime Minister Narendra Modi earlier on Monday.

Washington had earlier imposed a 25% import tax on Indian goods as part of its Liberation Day tariffs last year, and an additional 25% on India’s imports of Russian oil. This had made India one of the highest-tariffed countries.

Trump also said that PM Modi has agreed to stop buying Russian oil and instead increase energy imports from the United States and possibly Venezuela. Trump suggested that this change could help bring an end to the ongoing conflict in Ukraine. 

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“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 a statement.

India, meanwhile, has not officially commented on the claim that it will stop buying Russian oil. At the same time, officials on both sides have made it clear that the legal paperwork, timelines and final structure of the deal are still being worked out. A full and formal announcement, along with detailed implementation plans, is expected only after these processes are completed.

Trump says India has agreed to stop buying Russian oil

Trump on Monday shared the news on social media, calling it a “trade deal” between the two countries. He said he had discussed “many things, including trade, and ending the war with Russia and Ukraine” with PM Modi.

Trump, in his Truth Social post, said that PM Modi has agreed to stop buying Russian oil and instead increase energy imports from the United States and possibly Venezuela. Trump suggested that this change could help bring an end to the ongoing conflict in 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!”

India has not officially commented on the decision to halt purchases of Russian oil. However, Prime Minister Modi confirmed that he welcomed the US decision to cut tariffs on Indian goods, calling it a positive step for trade and economic cooperation.

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The US leader described the agreement as a full trade deal, effective immediately. Under it, the United States will reduce the reciprocal tariff from 25% to 18%, while India will lower its tariffs and non-tariff barriers on American goods to zero. Trump emphasised that India has also committed to “buy American” at much higher levels, covering over $500 billion in energy, technology, agricultural products, coal, and other goods.

“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 wrote. Trump did not explain how tariffs and barriers would be reduced or which US products India has agreed to buy. Officials from both sides are yet to release a detailed framework of the agreement.

He added, The Prime Minister also committed to ‘BUY AMERICAN,’ at a much higher level, in addition to over $500 BILLION DOLLARS of US Energy, Technology, Agricultural, Coal, and many other products. Our amazing relationship with India will be even stronger going forward.”

Trump ended his statement by noting the strong partnership with India: “Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most.”

PM Modi welcomes the move

Prime Minister Modi expressed his gratitude for the tariff cut, saying it will give a boost to the Make in India initiative. He wrote that he was “delighted that Made in India products will now have a reduced tariff of 18%” and thanked President Trump “on behalf of the 1.4 billion people of India.”

PM Modi added that cooperation between two large democracies creates opportunities that benefit both countries, and he looks forward to working closely with Trump to strengthen the partnership. “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”