India and the United States on Monday announced a breakthrough trade agreement, with President Donald Trump and Prime Minister Narendra Modi projecting the deal as a product of personal diplomacy and strategic alignment between the two countries. The understanding, reached during a phone conversation between the two leaders, envisages a sharp cut in US reciprocal tariffs on Indian goods and sweeping market-opening commitments, alongside claims of cooperation on energy and global security issues.
Announcing the agreement after a phone call with Prime Minister Narendra Modi, Trump said Washington would reduce the reciprocal tariff on Indian goods from 25 per cent to 18 per cent.
“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 per cent to 18 per cent,” Trump said on social media.
( @realDonaldTrump – Truth Social Post )
( Donald J. Trump – Feb 02 2026, 11:58 AM ET )
It was an Honor to speak with Prime Minister Modi, of India, this morning. He is one of my greatest friends and, a Powerful and Respected Leader of his Country. We s… pic.twitter.com/LhDi4p9gWo
— Donald J Trump Posts TruthSocial (@TruthTrumpPost) February 2, 2026
He added that India would “likewise move forward to reduce their tariffs and non tariff barriers against the United States, to zero”, and would buy American goods, including energy, worth more than USD 500 billion.
Trump also said Modi committed to stop buying Russian oil.
“He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela,” Trump said, adding, “This will help end the war in Ukraine, which is taking place right now, with thousands of people dying each and every week.”
“Our amazing relationship with India will be even stronger going forward. Prime Minister Modi and I are two people that get things done something that cannot be said for most,” he said.
Narendra Modi, Prime Minister of India
Confirming the tariff cut, Modi said he was pleased with the outcome of the talks.
“Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18 per cent. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi said on X.
He said cooperation between the two countries benefits both sides.
“When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” 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.
— Narendra Modi (@narendramodi) February 2, 2026
Calling Trump’s role important on the global stage, Modi added: “President Trump’s leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace.”
He said he looked forward to working with Trump “to take our partnership to unprecedented heights”.
Jamieson Greer, US trade representative
Earlier during negotiations, Greer had said the US was “fixing the problems of globalization”. He described India as “coming out on top” in its recent trade deal with the European Union, a factor that pushed Washington to conclude its own agreement so US companies would not be left behind.
Sergio Gor, US Ambassador to India
Confirming the 18% tariff rate on X, Gor said “no country possesses more strategic value to Washington than India,” adding that real friends can disagree but always resolve differences.
“It was an Honor to speak with Prime Minister Modi, of India, this morning… 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” – President Donald J. Trump 🇺🇸 pic.twitter.com/RD7PZ8S16z
— The White House (@WhiteHouse) February 2, 2026
Piyush Goyal, Union Commerce Minister
Welcoming the agreement, Goyal congratulated Modi and Trump, calling it a landmark deal.
“Congratulations to Prime Minister @NarendraModi ji and President @RealDonaldTrump, as well as to the people of India and the United States, on the landmark trade agreement. This reflects the power of two like-minded, fair-trading democracies working together for shared prosperity,” he said.
Congratulations to Prime Minister @NarendraModi ji and President @RealDonaldTrump, as well as to the people of India and the United States, on the landmark trade agreement. This reflects the power of two like-minded, fair-trading democracies working together for shared…
— Piyush Goyal (@PiyushGoyal) February 2, 2026
He thanked both leaders for their “visionary and decisive leadership” and said India and the US were “natural allies”.
“This agreement unlocks unprecedented opportunities for farmers, MSMEs, entrepreneurs, and skilled workers,” Goyal said, adding that it would help India access technology from the US.
Calling it transformative, he said, “It is not just a trade deal – it is a historic turning point that will reshape India–U.S. relations and accelerate our journey towards Viksit Bharat 2047.”
Nirmala Sitharaman, Finance Minister
Days before the announcement, Sitharaman said during the Budget 2026 presentation that India would seek to “blunt the attack” of global tariffs by simplifying customs duties and boosting export competitiveness, signalling the approach that fed into the final negotiations.
The Indian National Congress criticised Modi after Donald Trump announced a trade agreement, saying it seems the prime minister has “capitulated finally” and declaring that this “cannot be the father of all deals”.
Jairam Ramesh, Congress general secretary in charge of communications, took to X to criticise the handling of the deal, posting that in Washington “clearly Mogambo Khush Hai”, a reference to a popular Bollywood dialogue.
He wrote, “He (Trump) announced the halt of Operation Sindoor from Washington DC. He announced the updates on India’s oil purchases from Russia and Venezuela from Washington. He’s now announced an India-US Trade Deal from Washington, the full details of which are awaited.”
Ramesh added, “President Trump clearly seems to have some leverage over Prime Minister Modi — who is now mortified of even being seen with him, let alone engaging in the usual bout of hugs. It appears Mr Modi has capitulated finally. Surely this cannot be the father of all deals.”
