Trump-Modi Trade Deal: US President Cuts Tariffs in Exchange for India's Commitment to Buy American
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In a major breakthrough, India and the US have agreed to a key trade deal that reduces reciprocal tariffs on Indian imports from 25% to 18%. The $500 million pact was announced after a telephonic conversation between Prime Minister Narendra Modi and US President Donald Trump. The deal marks the end of nearly 12 months of tense negotiations, during which the US imposed some of the highest tariffs in the world on India. The negotiations were marred by the US administration's insistence that India cut its reliance on cheap Russian crude. Trump took to social media to announce the deal, stating that Modi had agreed to stop buying Russian oil and commit to buying American goods worth over $500 billion. The US President claimed that this would help end the war in Ukraine, which has resulted in thousands of deaths each week. Trump said he agreed to the deal out of friendship and respect for Modi, and that it would see the US charge reduced reciprocal tariffs, with India moving to zero tariffs on American goods. Modi took to X to thank Trump, saying the reduced tariffs would benefit India's 1.4 billion people and unlock opportunities for cooperation between the two countries. The deal comes after a series of tariff hikes by the US, including a 50% tariff on Indian goods in August 2025. The US had been pressing India to cut its reliance on Russian oil, and the deal marks a significant breakthrough in the bilateral relationship. Key details of the deal include: - Reciprocal tariffs reduced from 25% to 18% - India to cut tariffs on American goods to zero - Modi commits to buying American goods worth over $500 billion - Trump claims the deal will help end the war in Ukraine The deal marks a significant turning point in the India-US trade relationship, and has been welcomed by both countries. The full implications of the deal are yet to be seen, but it marks a major breakthrough in the bilateral relationship.
