Trump announced a reduction in reciprocal tariffs on Indian goods to 18% from 25% following a call with Prime Minister Modi.
The US president said India agreed to buy American and Venezuelan oil, alongside Russian supplies, though New Delhi has not confirmed this.
While Trump termed the move a trade deal, PM Modi did not describe the details of theagreement.
US President Donald Trump on Monday announced that the reciprocal tariff on India has been reduced to 18% from 25% earlier, after holding talks with Prime Minister Narendra Modi. In a post on Truth Social, Trump said that New Delhi agreed to stop buying Russian oil and would buy American and Venezuelan oil. Trump also declared that Washington has agreed to a trade deal with New Delhi.
In August, Washington imposed a sweeping 50% tariff on New Delhi, including a punitive tariff of 25% owing to New Delhi’s energy imports from Moscow. The US and other European allies have often blamed New Delhi for its purchases, which they claim are fueling Russia’s ongoing war with Ukraine.
1 January 2026
Get the latest issue of Outlook Business
Over the months, data suggests that New Delhi has reduced its imports of oil from Russia, with crude imports falling to a three-year low in December. Earlier it was reported that the ongoing India–US trade talks will conclude by November, though that deadline has long gone by.
“It was an honor to speak with Prime Minister Modi, of India, this morning,” Trump wrote in his post. “Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a trade deal between the United States and India, whereby the United States will charge a reduced reciprocal tariff, lowering it from 25% to 18%.”
Earlier in the day, the United States Ambassador to India, Sergio Gor, confirmed that Prime Minister Narendra Modi and US President Donald Trump held a telephone conversation. The interaction also comes shortly after visits to the United States by senior Indian ministers, including External Affairs Minister S. Jaishankar and IT Minister Ashwini Vaishnaw. Sharing the update on social media platform X, Gor wrote, “As I have said many times, President Trump genuinely considers Prime Minister Modi a great friend! Thrilled by the news of the trade deal this evening. The relationship between the United States and India has LIMITLESS POTENTIAL!”
PM Modi wrote on X thanking Trump and stated that Made in India products will now face reduced tariffs. “Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi said. “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”
However, PM Modi did not specifically categorise the announcement as a trade deal in his tweet.
