USA Cuts Tariffs on India from 50% to 18% After Landmark Trade Agreement, Opening New Economic Opportunities

The US has reduced tariffs on Indian goods from 50% to 18% under a new trade deal, strengthening bilateral trade, expanding market access, and boosting India-US economic cooperation.

Washington/New Delhi | 03 February, 2026 – In a major development for India-US trade relations, US President Donald Trump announced on Monday a historic trade agreement with India that significantly reduces tariffs on Indian goods. Under the agreement, tariffs previously set at 50% will now be lowered to 18%, ending a longstanding trade bottleneck.

The announcement came following discussions between President Trump and Prime Minister Narendra Modi, who expressed appreciation for the US cooperation and highlighted that the move marks a new chapter in India-US economic partnership.

As part of the trade deal, both nations have agreed to reduce retaliatory tariffs and non-tariff barriers (NTBs). India will address US tariffs and trade restrictions, while the US will slash duties on key Indian exports, including Made in India products, facilitating smoother market access for Indian manufacturers.

Prime Minister Modi, in a statement shared on social media, welcomed the announcement, thanking President Trump on behalf of India’s 1.4 billion citizens. He emphasized that cooperation between the world’s two largest economies and largest democracies will directly benefit citizens, unlock vast opportunities for mutual growth, and promote global peace, stability, and prosperity.

Additionally, as part of the strategic cooperation agreement, India agreed to stop purchasing oil from Russia and instead source oil from the US and Venezuela, reinforcing energy diversification and geopolitical alignment.

This landmark trade deal is expected to strengthen India-US ties, expand bilateral investment opportunities, and create new avenues for Indian exporters, while promoting a collaborative economic partnership on the global stage.

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