America has agreed to scale back the reciprocal tariff it levies on India from 50% to 18% in a serious enchancment in bilateral financial ties. The event comes after a phone dialog between US President Donald Trump and Prime Minister Narendra Modi earlier within the day.
The announcement, first made by the US President, marks a major shift in India-US commerce coverage following months of tariff-driven commerce tensions. Washington had slapped 25% import tax on Indian items as a part of its Liberation Day tariffs final yr, and a further 25% for New Delhi’s import of Russian oil, making India among the many highest tariffed international locations.
In an announcement posted on social media, Trump stated he had mentioned “many issues, together with commerce, and ending the battle with Russia and Ukraine” with PM Modi. He stated the discussions had resulted in what he termed a commerce deal between the 2 international locations.
In response to the US president, PM Modi has agreed to halt purchases of Russian oil and as an alternative broaden power imports from the USA and presumably Venezuela, a shift Trump steered may assist finish the continuing battle in Ukraine.
PM Modi phrases it push for Make in India
PM Modi thanked Trump, saying that the transfer will present a major push to the Make in India initiative.
“Fantastic to talk with my pricey buddy President Trump at the moment. Delighted that Made in India merchandise will now have a diminished tariff of 18%. Large because of President Trump on behalf of the 1.4 billion individuals of India for this glorious announcement,” PM Modi stated.
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“When two massive economies and the world’s largest democracies work collectively, it advantages our individuals and unlocks immense alternatives for mutually helpful cooperation. I stay up for working intently with him to take our partnership to unprecedented heights” he stated.
India will purchase Venezuelan crude oil: Trump
This comes a day after the Trump stated that New Delhi will likely be buying crude oil from Venezuela as an alternative of Iran and a deal in the direction of this finish was in place.
— Fast Response 47 (@RapidResponse47) February 2, 2026
What Trump introduced on Monday
US President Trump first introduced the settlement on a commerce deal between Washington and New Delhi.
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Right here is the complete assertion: “It was an Honor to talk with Prime Minister Modi, of India, this morning. He’s one in every of my best buddies and, a Highly effective and Revered Chief of his Nation. We spoke about many issues, together with Commerce, and ending the Struggle with Russia and Ukraine. He agreed to cease shopping for Russian Oil, and to purchase far more from the USA and, doubtlessly, Venezuela. This may assist END THE WAR in Ukraine, which is happening proper now, with 1000’s of individuals dying every week! Out of friendship and respect for Prime Minister Modi and, as per his request, efficient instantly, we agreed to a Commerce Deal between the USA and India, whereby the USA will cost a diminished Reciprocal Tariff, reducing it from 25% to 18%. They’ll likewise transfer ahead to scale back their Tariffs and Non Tariff Limitations towards the USA, to ZERO. The Prime Minister additionally dedicated to ‘BUY AMERICAN,’ at a a lot greater stage, along with over $500 BILLION DOLLARS of U.S. Vitality, Expertise, Agricultural, Coal, and plenty of different merchandise. Our wonderful relationship with India will likely be even stronger going ahead. Prime Minister Modi and I are two folks that GET THINGS DONE, one thing that can not be stated for many. Thanks to your consideration to this matter! PRESIDENT DONALD J. TRUMP”.
The announcement comes after the newly-appointed Ambassador to India, Sergio Gor, stated US President Trump spoke with Prime Minister Narendra Modi.
