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The United States and India announced a sweeping trade agreement that will slash tariffs and commit India to purchasing over $500 billion in American goods.
The deal follows President Donald Trump’s phone call with Prime Minister Narendra Modi last week.
The agreement marks a dramatic shift in U.S.-India trade relations, opening India’s 1.4 billion-person market to American exporters. It also ties economic cooperation to security concerns, with India pledging to stop buying Russian oil.
Trump agreed to remove a 25% tariff on Indian imports after India’s oil commitment. The U.S. will further reduce its reciprocal tariff on India from 25% to 18%.
India will eliminate or reduce tariffs on American industrial and agricultural products, including grains, nuts, fruit, and spirits. The country also agreed to remove digital services taxes and address non-tariff barriers that have long frustrated U.S. exporters.
India has maintained some of the world’s highest tariffs on American goods, averaging 37% on agricultural products. Certain automobiles faced tariffs exceeding 100%.
The nations will negotiate rules to ensure that trade benefits flow primarily to the U.S. and India, not to third parties. They also pledged to strengthen supply chain cooperation and expand technology trade.
Trump declared a national emergency in April 2025 over the U.S. trade deficit and lack of reciprocity with trading partners. The India deal represents his administration’s push to challenge what it calls decades of unfair trade practices.
Implementation begins in the coming weeks as both countries work toward a broader bilateral trade agreement. Outstanding issues include intellectual property, labor standards, and government procurement practices.