US-India trade deal finalised, PM Modi thanks Trump; tariff reduced to 18%

United States President Donald Trump said on Monday that the US agreed to a trade deal with India following a phone conversation with Prime Minister Narendra Modi. Trump said India stopped purchasing Russian crude, a move he linked directly to the agreement between the two countries.

 

In a post on Truth Social, Trump said the United States reduced its reciprocal tariff on India from 25 per cent to 18 per cent with immediate effect. He added that India “moved forward” to reduce tariffs and non-tariff barriers on US goods to zero.

 

Reacting to the development, PM Modi thanked Trump. “Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” he said in a post on X.

 

 

Trump, in his post, wrote, “It was an honour to speak with Prime Minister Modi, of India, this morning. He is one of my greatest friends and a powerful and respected leader of his country. We spoke about many things, including trade, and ending the war with Russia and Ukraine.”

 

He added, “He agreed to stop buying Russian oil, and to buy much more from the United States and, potentially, Venezuela.”

 

Trump said the decision would help end the war in Ukraine and claimed the agreement followed a direct request from Modi.

 

In the same post, Trump said Modi committed to “BUY AMERICAN” at a higher level, including purchases worth more than $500 billion across US energy, technology, agriculture, coal, and other products.

 

Trump wrote, “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.”

PM Modi thanks Trump

Shortly after Trump’s announcement, Modi said, “Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have 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.”

 

“When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” he added.

 

“President Trump’s leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace,” the Prime Minister said, adding, “I look forward to working closely with him to take our partnership to unprecedented heights.” 

Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.  When two large economies and the…

— Narendra Modi (@narendramodi) February 2, 2026

Union Minister Ashwini Vaishnav also reacted to the development.  

US and India are world’s largest democracies. Both countries are natural allies. Together, India and US have huge potential to work for peace and development.  US and India have complementary strengths. Both countries can co-create technologies and co-develop solutions that will…

— Ashwini Vaishnaw (@AshwiniVaishnaw) February 2, 2026

 

US envoy’s post sparks buzz

The statement came around an hour after US ambassador to India Sergio Gor said Trump spoke with Modi. Sharing a photograph of the two leaders in a post on X, Gor asked users to “stay tuned”. The post sparked buzz online around the possibility of the much-awaited trade deal.

 

In another post on X, minutes after Trump’s announcement, Gor said, “As I have said many times, President Trump genuinely considers Prime Minister Modi a great friend. I am pleased by the news of the trade deal this evening. The relationship between the United States and India has limitless potential.”

 

The development came a day ahead of External Affairs Minister S Jaishankar beginning a three-day visit to Washington. On Sunday, Trump said several countries, including India, started importing oil from Venezuela.

 

The agreement came amid delays in the India–US trade deal after Trump imposed a 50 per cent tariff on Indian exports over India’s continued purchase of Russian crude. The United States and India held trade negotiations since March 2025.

 

Earlier in the day, Trump shared a series of posts on Truth Social related to India. In one post, he shared the cover image of an India Today magazine issue featuring him and Modi.

 

In another post, he shared an image of India Gate and wrote, “India’s beautiful Triumphal Arch.” Trump said a similar monument in the United States would be “the greatest of them all.”