Prime Minister Narendra Modi Hails Historic US Tariff Cut to Boost India‑US Trade

New Delhi, 2026 : Prime Minister Narendra Modi has warmly welcomed a landmark decision by U.S. President Donald Trump to reduce trade tariffs on Indian goods, calling it a “wonderful” development and thanking Trump on behalf of India’s 1.4 billion people. The announcement — made by Trump on social media and confirmed by leaders in both capitals — marks a significant thaw in recently strained India‑US economic relations and is expected to energise bilateral trade.

On February 2, 2026, Trump posted on his platform that the United States would cut its reciprocal tariff on Indian imports from 25 percent to 18 percent, effective immediately, following a phone call with Prime Minister Modi. Modi responded within minutes, describing his conversation with Trump as “wonderful” and expressing delight that “Made in India products” would now face lower duties in the U.S. market. He extended a “big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.”

The tariff reduction comes after months of trade tensions that saw U.S. duties on Indian exports surge as high as 50 percent — a combined figure including a 25 percent reciprocal tariff and an additional 25 percent penalty linked to India’s previous purchases of Russian crude oil. Under the new understanding, the punitive levy has been withdrawn and only the reduced 18 percent tariff will now apply — a move that Indian exporters and industry groups have greeted with relief.

In his social media post, Trump emphasised that the deal reflects “friendship and respect” with India and said the United States would also work to lower barriers to Indian products beyond the tariff change. He added that India had committed to significant purchases of U.S. goods, including energy, technology and agricultural products, in a move aimed at deepening economic ties and balancing trade.

Prime Minister Modi highlighted the broader strategic benefits of the agreement, saying that when the world’s two largest democracies and major economic powers collaborate, their peoples stand to gain significantly. He also praised Trump’s leadership for global peace, stability and prosperity, and reiterated India’s intention to strengthen cooperation.

The decision is expected to have far‑reaching economic impacts. Reduced tariffs should make Indian textiles, engineering goods, gems and jewelry more competitive in the U.S. market, potentially boosting exports and encouraging investment. Market reactions were positive, with analysts noting that the deal could restore confidence after months of uncertainty, support export growth, and help diversify India’s trade relationships with major partners.

This development follows a challenging period in India‑US trade relations. Last year saw multiple tariff adjustments and heightened diplomatic pressure from Washington over energy sourcing, particularly India’s continued purchase of Russian oil amid geopolitical tensions. The new agreement appears to reset the trajectory, offering a partnership‑oriented approach that could pave the way for deeper economic engagement and collaboration in future areas of mutual interest.

Overall, the tariff reduction and the positive statements from both leaders signal renewed momentum in Indo‑American ties — one that could yield significant commercial and strategic benefits in the years ahead.

US Tariff Policy on Indian Goods: Then vs Now

Impact Comparison

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