In a major diplomatic and economic development, U.S. President Donald Trump and Indian Prime Minister Narendra Modi spoke by phone on Monday, announcing a new United States–India trade agreement designed to strengthen cooperation between the world’s two largest democracies.
President Trump, writing on his social platform, said he and Prime Minister Modi had agreed to a wide-ranging deal that will cut U.S. tariffs on products from India from 25 % to 18 % immediately. In return, India has committed to reducing its own tariffs and non-tariff barriers on American imports to zero, a move expected to dramatically expand U.S. exports to India across many sectors.
A central element of Trump’s announcement was India’s pledge to halt imports of Russian oil, a shift that the U.S. leader said would benefit both countries and contribute to efforts aimed at ending the war in Ukraine. India also agreed to boost purchases of American energy, technology, agricultural products and coal, with Trump highlighting a potential $500 billion increase in U.S. exports under the expanded trade relationship.
Prime Minister Modi responded with gratitude, posting that he was “delighted that Made in India products will now have a reduced tariff of 18 %”, thanking President Trump on behalf of India’s 1.4 billion people for the announcement and emphasizing that deeper cooperation would benefit both nations. Modi also said he looked forward to taking the partnership to “unprecedented heights,” and described Trump’s leadership as vital for global peace, stability and prosperity.
The deal marks a significant reset after months of tension in U.S.–India trade ties, including punitive tariffs imposed last year. Analysts say the agreement could boost business confidence, expand bilateral investment, and reshape energy and trade patterns between the two fast-growing economies.
