India and the United States have announced a bilateral trade deal that sharply reduces US tariffs on Indian goods to 18 per cent, following a phone conversation between Prime Minister Narendra Modi and US President Donald Trump.
The announcement was welcomed by senior ministers in the government, who described it as a turning point in India–US relations. It also triggered criticism from the Opposition, which questioned why key details first emerged from Washington rather than New Delhi.
The tariff reduction takes effect immediately. It follows a period of heightened trade tensions, during which the US had imposed punitive duties of up to 50 per cent on Indian goods.
Also Read: Trump-Modi call: US to reduce tariffs on India to 18%; PM confirms relief for Made-in-India products
What the tariff cut means for India–US ties
External Affairs Minister S Jaishankar, currently in the United States, welcomed the announcement and said it would deepen the economic and strategic partnership between the two countries.
“Welcome the announcements on bilateral trade following the conversation between PM @narendramodi and President @realDonaldTrump.
“This will create more jobs, spur growth and promote innovation in both economies. It will strengthen ‘Make in India’ endeavors and encourage trusted technology ties. The opportunities in our economic engagement are truly vast and we are confident of realizing them.
“A robust economic relationship is the strongest foundation for our strategic partnership,” he wrote on X.
Jaishankar is in the US to attend the Critical Minerals Ministerial convened by US Secretary of State Marco Rubio. The meeting is focused on clean energy transitions, supply chain resilience, and cooperation in critical minerals. He is also scheduled to meet senior members of the US administration during the visit.
Indian Ambassador to the US Vinay Mohan Kwatra described the deal as a major moment in bilateral ties.
“A big WIN for a consequential partnership under the leadership of Prime Minister Narendra Modi @narendramodi and President Donald Trump @POTUS. India and USA announce trade deal creating vast new opportunities for the two economies and the people of our two great nations. Today’s announcements herald an exciting new phase in our partnership,” he said in a post on X.
President Trump said the agreement would be “effective immediately”. Under the revised framework, the US will levy a reduced reciprocal tariff of 18 per cent, down from the earlier rate of 25 per cent.
The cut follows a sharper rollback earlier in the day. The US had reduced tariffs on India from 50 per cent to 18 per cent after the leaders spoke. The Trump administration had imposed the higher duties, including a 25 per cent penalty linked to India’s purchase of Russian oil.
US Embassy spokesperson Christopher Elms confirmed that “the final tariff on Indian goods is now 18 percent”.
Commerce Minister Piyush Goyal, who has been closely involved in the negotiations, called the agreement transformative.
“It is not just a trade deal – it is a historic turning point that will reshape India–U.S. relations and accelerate our journey towards Viksit Bharat 2047,” he said on X.
Goyal said the agreement would open new opportunities for entrepreneurs, MSMEs, farmers, and skilled workers, while strengthening technology access from the US. He added that India and the US were “natural allies” whose partnership would co-create technologies and solutions for global growth and stability.
The US–India Strategic Partnership Forum also welcomed the announcement, saying it reaffirmed both countries’ commitment to deepening economic ties and advancing a bilateral trade agreement.
Union Minister for Railways, Information & Broadcasting, Electronics & Information Technology Ashwini Vaishnaw echoed the sentiment, calling the deal a “win-win” that would benefit citizens and industries on both sides.
Opposition questions process, cites ‘Trump-nirbharta’
The announcement, however, drew sharp criticism from the Congress.
Senior leader Jairam Ramesh said India was increasingly learning about key national decisions from Washington rather than its own government. He described this as “Trump-nirbharta”, or dependence on President Trump.
“It seems that Prime Minister Modi and President Trump spoke to each other today. This information has been provided not by the Indian side but by the US Ambassador to India. This now seems to be the routine – India gets to know of its Govt’s actions only from President Trump or his appointees. Trump-nirbharta,” Ramesh wrote on X.
In a separate post, he linked the trade deal announcement to earlier remarks by Trump on Operation Sindoor. The US President had previously claimed a role in de-escalating India–Pakistan tensions during the operation, a claim the Indian government has denied.
“He announced the halt of Op Sindoor from Washington DC. He announced the updates on India’s oil purchases from Russia and Venezuela from Washington. He’s now announced an India-US Trade Deal from Washington, the full details of which are awaited,” Ramesh wrote.
“President Trump clearly seems to have some leverage over Prime Minister Modi… It appears Mr. Modi has capitulated finally. Surely this cannot be the father of all deals. In Washington clearly Mogambo Khush Hai,” he added.
Prime Minister Modi later confirmed the conversation and welcomed the tariff cut.
“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,” he said on X.
He said closer cooperation between the two countries would benefit their people and strengthen global stability, and expressed support for Trump’s efforts towards peace.
The announcement comes days after India and the European Union concluded negotiations on a Free Trade Agreement, underlining New Delhi’s push to expand market access amid shifting global trade dynamics.