World News
US-India trade deal: Tariff on Indian exports cut to 18%
US President Donald Trump announced that Washington and New Delhi have agreed on a trade understanding after a phone call with Prime Minister Narendra Modi. Under this understanding, the reciprocal tariff on Indian goods entering the United States will be cut to 18% from as high as 50%.
US President Donald Trump announced that Washington and New Delhi have agreed on a trade understanding after a phone call with Prime Minister Narendra Modi. Under this understanding, the reciprocal tariff on Indian goods entering the United States will be cut to 18% from as high as 50%.
- The earlier 50% figure included a 25% base tariff plus an additional 25% penalty levy imposed when India continued to buy discounted Russian crude.
- A US embassy spokesperson later confirmed the effective tariff on India is now 18%.
✔ PM Modi welcomes the announcement:
Prime Minister Narendra Modi thanked Trump, saying he was “delighted that Made in India products will now face a reduced tariff of 18%” and expressing optimism about strengthening the US-India economic partnership.
✔ Broader deal claims by Trump:
Trump said the understanding also envisioned India lowering its own tariff and non-tariff barriers on US goods — potentially to zero — and significantly increasing imports of US energy, technology, agricultural products and coal, possibly exceeding $500 billion.
✔ Market reaction:
India’s financial markets responded positively:
- The Nifty 50 index surged nearly 3%, marking one of its best single-day gains in years,
- The Indian rupee strengthened against the dollar.
✔ Reaction and context:
- Leaders including Amit Shah, Rajnath Singh and Jaishankar welcomed the tariff reduction, calling it historic for bilateral trade.
- The move comes after a period of tense trade relations, including earlier tariff hikes on Indian exports.
What’s still unclear
- Neither the Ministry of External Affairs (MEA) nor the Commerce Ministry has released an official joint announcement text.
- Some details — such as timelines for implementing tariff changes, product-by-product schedules, and whether India will formally agree to zero tariffs on US imports — are not yet confirmed by official Indian sources.
