|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
With India-US trade pact in place, tariffs cut from 25% to 18%; no more oil levy
|
|
Wednesday, 04 February, 2026, 08 : 00 AM [IST]
|
|
Ashwani Maindola, New Delhi
|
In a major diplomatic breakthrough that signals a cooling of global trade tensions, India and the United States have officially finalised a trade agreement. Following a crucial phone call between Prime Minister Narendra Modi and U.S. President Donald Trump, the two nations have agreed to a new tariff structure, that drastically lowers barriers for "Made in India" goods entering the American market.
The centrepiece of the deal is a significant reduction in the U.S. "reciprocal" tariff on Indian exports. Effective immediately, the rate has been cut from 25% to 18%. Additionally, Washington has confirmed the removal of a separate 25% penal levy that had been imposed due to India’s previous purchases of Russian oil.
For Indian exporters, this represents a massive victory, bringing total potential tariffs down from a staggering high of 50% in some categories to a consolidated 18%. This shift places India in a more competitive position than regional rivals like Vietnam and Bangladesh, and offers a sharp advantage over China, which continues to face much higher U.S. duty rates.
While the announcement has been met with widespread celebration by industry leaders, some analysts and opposition figures remain cautious.
The deal was announced by Trump through a statement on Truth Social. Trump said, “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% to 18%. They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to Zero.”
In a statement issued through X, Modi has 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.”
He added, “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation. President Trump’s leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace. I look forward to working closely with him to take our partnership to unprecedented heights.”
Union Commerce Minister Piyush Goyal has said that this deal unlocks the power of two large democracies working together for the shared prosperity of their people.
“Both India and US are natural allies and our partnership will co-create technologies, co-develop solutions, and work together for peace, growth, and a brighter future for India and the US. This agreement unlocks unprecedented opportunities for farmers, MSMEs, entrepreneurs, and skilled workers to Make in India for the world, Design in India for the world, and Innovate in India for the world. It will help India get technology from the US.”
|
|
|
|
|
|
|
|
|
|