- US reduce tariffs on Indian goods to 18%, boosting trade and strengthening economic ties.
- India welcomes deal, with textile, seafood, and engineering sectors set to benefit significantly.
- US agree to remove punitive duties, easing trade tensions and enhancing competitiveness for Indian exporters.
The United States and India have created their first major trade agreement which decreases tariffs on Indian goods that American importers bring into the United States.
US President Donald Trump announced that the reciprocal tariff on Indian goods will be reduced from 25% to 18% effective immediately following a phone call with Indian Prime Minister Narendra Modi. The agreement establishes peace after months of tariff disputes while working to enhance economic connections between the two largest democratic nations.
The US has decided to eliminate extra penalties which were imposed in 2025 because of India's ongoing Russian oil imports according to the agreement.
The announcement signals a de-escalation of trade frictions and will reduce cost burdens which Indian exporters face in major industries including textiles and seafood and engineered goods thus making them more competitive in the US market.
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The US will eliminate extra punitive duties which the country implemented during 2025 and which reached up to 50% because of India's ongoing Russian oil purchases according to the terms of the agreement.
India will lower its import restrictions from the United States as part of the exchange agreement which will eventually result in complete tariff and non-tariff barrier elimination for American products.
The analysts predict that the trade agreement will increase trade between the two countries while helping export-based industries and driving economic development and strengthening diplomatic relations between the two nations.