Trump announces trade deal with India Highlights: Trump cuts tariffs on Indian imports to 18% after call with PM Modi

External Affairs Minister S Jaishankar on Tuesday welcomed the India-US trade agreement, saying it will spur growth in both economies and strengthen the country's 'Make in India' endeavours.

In a post on 'X', Jaishankar said, "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. A robust economic relationship is the strongest foundation for our strategic partnership," the external affairs minister added.

The reduction in US tariffs on Indian exports is expected to provide a significant boost to India’s economy, according to Deepak Agrawal, Chief Investment Officer – Debt at Kotak Mutual Fund. He described the move as “a welcome development” with far-reaching implications for the country’s macroeconomic outlook.

"The reduction in tariff on Indian exports to the US is indeed a welcome move, expected to boost India's economy. This development is likely to improve the country's balance of payments (BOP) gap, strengthen the rupee, and increase foreign exchange (FX) reserves and attract foreign institutional investors (FIIs) who had been waiting on the sidelines. Additionally, Indian equities have become more attractive as their valuation premium has narrowed over the past year. This positive macroeconomic outlook is also expected to keep interest rates stable." - Deepak Agrawal, CIO -Debt, Kotak Mutual Fund

UP CM Yogi Adityanath posted on X: "A landmark moment for the India–US economic partnership. A major boost to #MakeInIndia, as Indian products will gain wider global market access, creating fresh opportunities for Indian youth and MSMEs. Thank you, Hon. PM Shri @narendramodi Ji, for your decisive and determined leadership in advancing stronger India-US ties. This milestone reflects rising global confidence in Made in India and reinforces India’s position as a key driver of global growth."

Maharashtra CM Devendra Fadnavis wrote on X: "A big day for Made in India! Our products will now reach wider global markets, creating new possibilities for young entrepreneurs, farmers, and MSMEs. This progress reflects the decisive leadership of Hon PM @narendramodi Ji, who has positioned India firmly on the global growth map. Stronger India–US ties will only amplify this momentum for the world."

Union Minister Kiren Rijiju posts on X: "India and the US, the world’s truest democracies, are natural partners with shared values and global responsibility. Together, we have the potential to advance peace, development, and innovation. Under the leadership of PM @narendramodi ji, India’s global engagement continues to grow stronger. The India–US trade partnership reflects mutual trust and opportunity—benefiting citizens, farmers, youth, and industries in both countries."

Engineering Export Promotion Council (EEPC) President Pankaj Chadha commented on the recently announced India–US trade agreement, highlighting the status of industrial tariffs and India’s key concerns.

“As far as tariffs on industrial goods is concerned, we have already offered him zero tariff a few months ago; that offer has been on the table for at least two months now,” Chadha said.

Chadha emphasized that certain sectors remain sensitive. “The fact is, our red line still remains with agriculture and dairy. As long as President Trump is honouring our red lines, the deal was going on for a long time,” he explained.

The US–India Strategic Partnership Forum (USISPF) has welcomed the announcement of a bilateral trade agreement following a phone call between US President Donald Trump and Prime Minister Narendra Modi, calling it an important step toward deepening economic cooperation between the two countries.

“The reduction of India’s reciprocal tariff marks an important and positive first step,” USISPF said.

USISPF said the announcement demonstrates strong political will on both sides to advance a comprehensive US–India Bilateral Trade Agreement (BTA). The forum emphasized that such an agreement would address tariffs, market access, non-tariff barriers, and other trade-related issues across multiple sectors.

“A BTA between the two nations would deliver meaningful benefits for businesses, workers, and consumers in both countries, while strengthening supply chains and economic resilience,” USISPF added.

“USISPF is encouraged by the constructive momentum generated by this announcement and remains optimistic about the scope and ambition of what lies ahead,” it said.

“A stronger US–India trade and investment relationship is not only critical to both economies but also central to advancing a stable, resilient, and rules-based Indo-Pacific,” the forum said.

Kumar Mangalam Birla, Chairman, Aditya Birla Group:

-Commends Prime Minister Modi and President Trump for the India–US trade deal.

-Notes the tariff cuts will strengthen strategic and economic ties between India and the US.

-Highlights new opportunities for investment and collaboration for businesses.

-Expects the agreement to help build stronger and more resilient supply chains.

-Believes the deal will unlock manufacturing opportunities in both countries.

-Predicts it will drive economic competitiveness in India and the US.

-Sees substantial opportunities for innovation, growth, and enduring partnerships through the deal.

Union Home Minister Amit Shah described it as a “big day for India-US relations,” noting the reduced tariff of 18% and the prospects for stronger trade ties and mutual growth.

Amit Shah wrote on X: "A big day for India-US relations as the trade deal has been locked with a significantly reduced tariff of 18%, paving the way for stronger trade ties and mutual growth. I congratulate PM @narendramodi and President @realDonaldTrump for this historic deal, which will elevate our strategic partnership and greatly benefit both nations and their people. Business between India and US set to flourish further."

Piyush Goyal, Commerce Minister, praises PM Modi, President Trump, and the people of India and the US for the landmark trade agreement.

– Highlights that the deal reflects cooperation between two like-minded, fair-trading democracies.

– Commends the visionary and decisive leadership of PM Modi and President Trump in strengthening India-US ties.

– Emphasizes the potential for India and the US to co-create technologies, co-develop solutions, and work together for peace, growth, and a brighter future.

– Notes that farmers, MSMEs, entrepreneurs, and skilled workers will benefit through initiatives like “Make in India,” “Design in India,” and “Innovate in India.”

– Describes the agreement as a historic turning point that will reshape India-US relations and accelerate India’s journey toward Viksit Bharat 2047.

Union Minister Ashwini Vaishnaw posts, "US and India are world’s largest democracies. Both countries are natural allies. Together, India and US have huge potential to work for peace and development.

US and India have complementary strengths. Both countries can co-create technologies and co-develop solutions that will benefit the world.

Trade deal between US and India will lead to brighter future for both countries.

India-US Trade deal is a win-win deal. Citizens and industries of both countries will benefit greatly from this deal."

"India US trade deal has gone through ups and downs like a roller coaster. While devil is in the details, it removes a hanging sword over rupee, equity and rates market. Let us hope that it is a win win deal for both the countries as they have lot to gain through cooperation," said Nilesh Shah, MD Kotak Mahindra AMC.

Prime Minister Narendra Modi said that he is looking forward to working closely with US President Donald Trump as the two large economies aim to benefit the people and unlock immense opportunities via mutual cooperation.

“When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation. President Trump’s leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace. I look forward to working closely with him to take our partnership to unprecedented heights,” said Modi in his latest post on X.

US President Donald Trump's announcement highlighted that the US-imposed reciprocal tariffs have been lowered to 18% with immediate effect, from 25% levels.

However, no announcement has been made from either side on the additional tariffs of 25% which were imposed after 25% reciprocal tariffs on India for buying Russian oil.

So the effective tariff reduction from the raging 50% total duty on India will now come down to 43%, until further update from either of the countries.

“We spoke about many things, including Trade, and ending the War with Russia and Ukraine. He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week!” said Trump in his announcement.

After US President Donald Trump announced the India-US trade deal, Indian Prime Minister Narendra Modi thanked his friend from the western nation as now Indian products will attract less tariffs in India compared to their earlier 25% levels.

“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,” said PM Narendra Modi in his post on X.

The US Ambassador to India, Sergio Gor, in a post on X, lauded the India-US trade deal announcement and said that Prime Minister Narendra Modi is a “great friend” to President Donald Trump and the relationship potential that the United States has with India is ‘limitless.’

“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!” said Ambassador Sergio Gor in his recent post on platform X.

Along with the long-awaited India-US trade deal announcement, US President Donald Trump on Monday, 2 February 2026, also said that the United States will reduce the ‘reciprocal’ tariffs down to 18%.

“The United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%,” said Trump on Monday.

US President Donald Trump, on Monday, 2 February 2026, said that the United States has agreed on a trade deal with India.

“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,” said Donald Trump in his recent post on Truth Social.