ALBAWABA- U.S. President Donald Trump announced a new trade agreement with India on Thursday that cuts reciprocal tariffs on Indian imports from 25% to 18%, part of a broader effort to strengthen bilateral economic ties and align strategic interests, including energy sourcing and geopolitical cooperation.
Trump said in a Truth Social post that he spoke with Indian Prime Minister Narendra Modi earlier in the day, describing him as a “powerful and respected leader” and outlining the key elements of the pact. Under the deal, India has agreed to stop purchasing Russian oil and instead increase energy, technology, agricultural, and other imports from the United States, with trade potentially reaching $500 billion by 2030.
“The Prime Minister also committed to ‘BUY AMERICAN’ at a much higher level,” Trump wrote, adding that the two leaders “get things done,” as New Delhi moves to reduce tariffs and non-tariff barriers on U.S. goods to zero.
In return, the United States immediately reduced its tariffs on Indian goods to 18% and agreed to drop a portion of the higher duties that had strained ties in 2025.
The punitive tariff measures, initially doubled to 50% in August over India’s continued imports of Russian crude, had hit sectors such as textiles, chemicals and other exports, dampening trade relations.
The agreement marks a notable shift in India’s energy strategy amid geopolitical pressure, aligning New Delhi more closely with Western partners by phasing out Russian oil purchases, a central U.S. demand in negotiations.
The deal comes as India also pursues other trade partnerships, most recently signing a landmark free trade agreement with the European Union on January 27, expanding market access and diversifying foreign economic engagements.
The U.S.–India agreement eases near-term tensions and deepens strategic economic ties but leaves implementation challenges as global trade uncertainties and geopolitical pressures continue to shape policy decisions in both capitals.
