UPDATED: Feb 3, 2026 01:59 IST
US President Donald Trump has announced a trade agreement with India that reduces tariffs on Indian goods from 50 per cent to 18 per cent, easing long-standing trade frictions between the two biggest democracies of world.
A White House official told new agency Reuters that the United States had withdrawn the punitive duty linked to Russian oil imports, leaving only the revised reciprocal tariff in place.
The move is expected to make Indian exports more competitive in the US market and improve trade flows after months of pressure on Indian businesses.
HOW OTHER COUNTRIES COMPARE
With India now at an 18 per cent tariff rate, it stands in a relatively strong position compared to several regional and global competitors.
According to the White House, China faces a tariff of 37 per cent, while Brazil is subject to duties as high as 50 per cent. South Africa faces 30 per cent, and countries such as Myanmar and Laos are taxed at 40 per cent.
In contrast, the European Union, Japan, South Korea and Switzerland are charged around 15 per cent, while the UK benefits from a lower rate of 10 per cent. Southeast Asian economies such as Vietnam, Malaysia, Cambodia and Thailand fall in the 19 to 20 per cent range.
These comparisons underline how India’s revised rate places it closer to major US allies and trading partners.
TRUMP LOWERS TARIFFS
President Trump announced the agreement in his trademark style on his social media platform, Truth Social.
"It was an Honor to speak with Prime Minister Modi... We spoke about many things, including Trade, and ending the War with Russia and Ukraine," he wrote.
Trump added that Modi had agreed to stop buying Russian oil and increase purchases from the United States and "potentially, Venezuela", saying this would help "END THE WAR in Ukraine".
"Our amazing relationship with India will be even stronger going forward," he said. India has recently slowed Russian purchases. According to Reuters, imports fell to about 1.2 million barrels per day in January and are projected to drop further in the coming months.
Prime Minister Narendra Modi welcomed the development, calling it a boost for "Made in India" products. In a post on X, he wrote: "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."
FEW DETAILS ON IMPLEMENTATION
Despite the high-profile announcements, several aspects of the agreement remain unclear.
Trump’s post did not specify when the new tariffs would come into effect, how trade barriers would be reduced, or which US products India had committed to buying. Officials on both sides are yet to release a detailed framework of the deal.
The agreement comes days after India signed a major trade deal with the European Union, which is expected to cut or eliminate tariffs on over 96 per cent of traded goods, though key farm products were excluded.
Curated by Aisha Patel
