Trump announces India-US trade deal, cuts tariffs to 18% after PM Modi’s phone call

February 3, 2026

New Delhi: US President Donald Trump on Monday announced a new bilateral trade deal with India following a telephonic conversation with Prime Minister Narendra Modi, in a move expected to reshape commercial ties between the world’s two largest democracies.

In a post on his social media platform, Trump said that under the agreement, the United States will lower reciprocal tariffs on Indian imports to 18 per cent, down from the previously higher rates that had been imposed amid trade tensions. The deal marks a significant shift in strategy after months of negotiations, tariff pressures and live discussions between officials of both countries.

According to the US envoy to India, Sergio Gor, Trump spoke with Prime Minister Modi ahead of the announcement, though New Delhi had not immediately commented on the details of the conversation. Sources say the deal follows ongoing efforts to expand bilateral trade, reduce barriers and create a more balanced economic relationship after previous tariff disputes.

The agreement also includes commitments to address non-tariff barriers and enhance access for key sectors such as energy, technology and agriculture. Observers suggest that both nations aim to boost two-way trade and strengthen strategic ties amid broader geopolitical shifts and global economic competition.

The announcement comes as a milestone in India-US relations, signalling an end to months of tariff uncertainty and a fresh chapter of economic cooperation.