President Trump and PM Modi call for cuts in US Tariffs on India to 18%
US President Donald J. Trump held a telephonic conversation with Prime Minister Narendra Modi on the morning of February 2, during which the two leaders discussed trade, global security, and the ongoing Russia-Ukraine war. Describing Prime Minister Modi as one of his closest friends and a strong, widely respected leader, Trump said the discussion covered several key global issues.
According to Trump, both leaders spoke at length about trade relations and ways to bring an end to the conflict between Russia and Ukraine, which continues to claim thousands of lives every week. He stated that India agreed to stop purchasing Russian oil and instead increase energy imports from the United States and potentially Venezuela, a move he claimed would contribute toward ending the war.
One of the most significant outcomes of the conversation was a new trade agreement between India and the United States. With immediate effect, the US has agreed to reduce reciprocal tariffs on Indian goods from 25% to 18%, reversing the steep 50% penalty tariffs imposed on India in August 2025. Prime Minister Modi later confirmed that products manufactured under the "Made in India" initiative will now be eligible for the lower tariff rate in the US market.
Trump noted that India would also move to reduce its own tariffs and non-tariff barriers, while committing to significantly higher purchases of American products. These include energy, technology, agricultural goods, coal, and other sectors, with total purchases expected to exceed $500 billion. He added that the agreement reflects mutual respect and both leaders' ability to deliver results.
In comparison with other Asian nations, India now faces one of the lowest US tariff rates in the region. China remains at the higher end, while countries such as Pakistan, Indonesia, and Thailand face similar or higher tariff levels, reinforcing India's improved trade position.
Prime Minister Modi, in a post on X, said that when two large economies and the world's biggest democracies work together, it creates opportunities that benefit people on both sides. Commerce and Industry Minister Piyush Goyal welcomed the development, calling it a positive step for bilateral trade, while the Ministry of External Affairs has said further details are being examined.
The phone call coincided with External Affairs Minister S. Jaishankar's visit to the United States from February 2 to 4, where he is participating in the Critical Minerals Ministerial. The meeting focuses on strengthening supply chains, advancing clean energy transitions, and fostering strategic cooperation on critical minerals, with participation from several mineral-rich countries.
The developments signal a renewed push to reset US-India relations after a period of strain, pointing toward deeper economic engagement and broader strategic cooperation in the months ahead.