In a major boost for bilateral ties, the US cuts India tariffs on goods from 25% to 18%, President Donald Trump announced Monday after a phone call with Prime Minister Narendra Modi. The move ends months of trade tensions, signaling stronger India-US partnership amid global energy shifts.
Trump-Modi Call Sparks Trade Breakthrough
Trump shared details on Truth Social late Monday, revealing discussions on the Russia-Ukraine war. "PM Modi agreed to stop purchasing oil from Russia. India will now buy more oil from the United States," he posted. He added flexibility for Venezuela oil imports if needed, aiming to pressure Russia and aid Ukraine.
The deal slashes the 2019 reciprocal 25% tariff—plus an extra 25% penalty for India's Russian oil buys—to a flat 18%. A White House official confirmed the Russian oil penalty ends immediately. Trump highlighted India's "Buy American" commitment: over $500 billion (₹46 lakh crore) in US energy, tech, agriculture, and coal.
PM Modi responded swiftly on X: "Thank you, President Trump, on behalf of 1.4 billion Indians." He praised the tariff cut on "Made in India" products, noting it opens opportunities between the world's top economies and democracies.
Why This Matters Now for India-US Ties
This India-US trade deal arrives amid volatile global oil markets and US election-year focus on "America First." With Russia supplies strained by sanctions, India's shift reduces energy costs and aligns with Western allies. US Ambassador Sergio Gor called it "almost final," with technical papers pending. He noted India's tariffs now rank among the world's lowest, reflecting Modi-Trump friendship.
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Key Wins for India: Lower export barriers boost textiles, pharma, and gems amid slowing global growth.
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US Gains: Massive "Buy American" purchases create jobs; Venezuela option eases Ukraine war pressures.
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Global Ripple: Eases India-Russia ties strain, stabilizes oil prices.
Trump hyped the mood pre-call with Truth Social posts: India Gate photos and a Modi cover. He teased his "Arc de Trump" arch in Washington, inspired by triumphs like India's.
Road Ahead for Stronger Partnership
Modi emphasized eagerness to "strengthen India-US partnership to new heights." Experts see this as a template for zero tariffs and non-tariff barriers. For Indian exporters, it's timely relief—trade with the US hit $120 billion last year.
As technical signings loom, this deal underscores personal diplomacy's power. Stay tuned for implementation details.
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