India-US trade deal: Trump cuts India's tariffs from 25% to 18%, 'effective immediately' after speaking to PM Modi

US President Donald Trump moved quickly on Monday from a phone call with Prime Minister Narendra Modi to a headline tariff decision, announcing that he would reduce reciprocal tariffs on India from 25 per cent to 18 per cent. The shift, revealed on Trump’s Truth Social account, signalled a thaw in India-US ties after weeks of tension around steep tariff measures.

Responding to Trump’s Truth Social post, Prime Minister Narendra Modi said “Made in India” products will now attract a reduced tariff of 18 per cent. “Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” PM Modi tweeted.

According to Reuters, the Trump administration will lift the additional 25% tariff imposed on India’s purchases of Russian oil. “We are also dropping the 25% tariff given India’s agreement to stop buying Russian oil,” a White House official said.

The buildup before the announcement

Before Trump’s tariff post, there was a visible buildup online. The US President shared an image of himself with PM Modi on Truth Social, the cover of India Today magazine’s "Newsmakers of the Year 2025" edition featuring both leaders, without any accompanying text.

Soon after, US envoy to India Sergio Gor posted, "Stay tuned," and added, "President Trump just spoke with Prime Minister Modi."

‘Final number will be 18’: Sergio Gor 

Speaking to India Today after President Trump’s announcement, Sergio Gor said, "We are thrilled to have reached this successful outcome."

He added that President Trump also recalled his last visit to India and said that Prime Minister Narendra Modi had invited him to return.

However, while talking to India Today, TV Gor said that the tariffs have been brought down to 18 per cent from 50 per cent.

"The final number will be 18, and whether that takes an hour or two days, there are technicalities to work out and paperwork to be signed, but the number will be 18," Gor told India Today TV. He also revealed that he had sent the India Today magazine cover to Trump during Republic Day and expressed surprise that Trump went ahead and posted it on Monday.

Trump says India-US trade deal is now agreed

Trump also indicated that a long-awaited US-India trade deal, which had faced roadblocks, including New Delhi’s stance on not opening its agriculture sector to Washington, is now set to move forward.

He said he lowered the reciprocal tariffs following discussions with PM Modi, describing the move as a gesture of "friendship and respect."

"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%," he wrote on Truth Social.

During the call, Trump further said that Prime Minister Narendra Modi had agreed to stop buying Russian oil and to divert India’s oil imports to the US and Venezuela.

Celebrating the development of PM Modi agreeing to stop buying oil from Russia, Trump went on to write, "This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week! They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO."