After months of discussions and speculation, a trade deal between India and the United States has finally been agreed upon. US President Donald Trump took to social media on Monday to announce the pact, which was welcomed by Prime Minister Narendra Modi and other Indian ministers.
What’s inside India-US trade deal?
Here’s what Trump claimed:
1. PM Modi agreed to stop buying Russian Oil
2. PM Modi agreed to buy much more from the US and, potentially, Venezuela.
3. The US will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%.
4. India will move forward to reduce their tariffs and non-tariff barriers against the US to ZERO
5. PM Modi committed to ‘BUY AMERICAN,’ at a much higher level – India to buy over $500 billion dollars of US energy, technology, agricultural, coal, and many other products.
Deal done, what’s next?
The governments of the United States (US) and India will now work towards the official documentation of tariff changes, sources told CNBTV18.
They reportedly said that while overall tariffs on India were slashed from 50 percent to 18 percent, there will be more clarity on tariff lines and Section 232 tariffs soon.
Items that fall under Section 232 items may continue to face tariffs. They include automobiles, steel, aluminium, timber, copper and trucks and ships.
Beginning February 10, 2025, President Trump had issued multiple proclamations that directed a number of actions to broaden and increase Section 232 tariffs on imports of steel and aluminum and derivative products.
Later, the President issued a Proclamation increasing Section 232 tariffs on subject steel and aluminum imports to 50 percent for all countries except the UK, which remains at 25%. The increase took effect on June 4, 2025.
Like other countries, India too has exposure to sectors which fall under the ambit of the Section 232 tariffs. According to available data, one-tenth of India’s exports or over $8 billion worth of exports may still face higher tariffs, CNBCTV-18 reported.
What did PM Modi, Jaishankar say?
Prime Minister Narendra Modi welcomes the India-US trade deal. He confirmed the reduction in tariff as claimed by Trump, but fell short of confirming other claims, such as India’s decision to stop buying Russian oil and buy American products as part of the deal.
In a post on X, PM Modi said, “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.”
Meanwhile, External Affairs Minister S Jaishankar also welcomes the move, saying, “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,” Jaishankar said.
“A robust economic relationship is the strongest foundation for our strategic partnership,” he added.
Union Minister Nitin Gadkari also lauded PM Modi and US President Donald Trump over the announcement of the India-United States trade deal, stating that it will further strengthen the trust between both countries and will significantly boost confidence in business, trade, and investment.