US and India Agree Trade Deal as Tariffs Lowered to 18%, Trump Says
U.S. President Donald Trump said on Monday, February 2, 2026 that the United States and India have reached a trade deal aimed at reducing longstanding trade tensions. The agreement was announced after a call between Trump and Indian Prime Minister Narendra Modi and described as a move to strengthen economic ties.
Tariff Changes and Trade Terms
Under the deal, the U.S. will cut tariffs on Indian goods to 18 per cent from much higher levels previously imposed during recent trade disputes. India has agreed to lower trade barriers and gradually halt imports of Russian oil, while increasing purchases of U.S. goods, including energy and agricultural products. Both leaders said the agreement is intended to expand bilateral trade and investment.
Implementation and Market Response
Details on specific goods and effective dates have not yet been fully formalised, and formal approval processes are expected in both countries before the changes take effect. Indian markets responded positively to the announcement, with key equity indices rising on expectations of improved export competitiveness and deeper economic cooperation.
The deal follows months of negotiations and previous tariff escalations that had strained U.S.–India trade relations.
