WASHINGTON, D.C. – India and the United States have finalized a landmark trade agreement, with the U.S. reducing reciprocal tariffs on Indian goods from 25% to 18%, U.S. President Donald Trump announced after a phone call with Prime Minister Narendra Modi. In return, India will eliminate tariffs and non-tariff barriers on U.S. goods and increase purchases of American energy, technology, agricultural, and coal products, estimated at over $500 billion.

Prime Minister Modi welcomed the development, noting that “Made in India” products will now enjoy lower tariffs and emphasizing the wider benefits of collaboration between the world’s two largest democracies. “When large economies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” he said.

The agreement follows months of negotiations that had stalled over prior U.S. tariffs on Indian goods tied to Russian crude. With this deal, India’s exports gain a competitive advantage over other Asian markets, where U.S. tariffs range from 19% to 34%.

The leaders also discussed global security issues, including the Russia-Ukraine conflict, with Modi agreeing to reduce Russian oil imports. Analysts say the deal strengthens India-U.S. strategic ties, boosts trade, encourages private-sector investment, and supports technological collaboration across energy, agriculture, and high-tech manufacturing sectors.