NEW DELHI — The United States and India finalized a long-sought trade agreement Monday after months of rancorous negotiations, steadying a relationship that had plummeted to its lowest point in decades.
President Donald Trump announced the deal in a Truth Social post, saying Washington will lower its 25 percent tariff on goods imported from India to 18 percent, with New Delhi reducing its tariffs on U.S. goods to “zero.” A White House official, speaking on the condition of anonymity to discuss sensitive matters, said the administration will also be dropping the additional 25 percent tariff imposed by Trump in August to penalize India for its purchases of Russian oil.
Indian Prime Minister Narendra Modi “agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela,” Trump wrote. “Our amazing relationship with India will be even stronger going forward.”
In a post shortly after on X, Modi thanked Trump “for this wonderful announcement” and said that “when two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities.” He appeared to confirm the new 18 percent rate on Indian products but did not mention Russian oil or Trump’s claim that India would eliminate its tariffs on American goods.
The White House and India’s Ministry of External Affairs did not immediately respond to questions from The Washington Post.
The agreement was reached just days after India signed a sweeping trade deal with the European Union, part of the country’s efforts to diversity its global partnerships amid tensions with Washington.
Relations between the two countries were expected to reach new heights during Trump’s second term but soured rapidly after India’s conflict with Pakistan in May and the president’s decision to single out India for becoming a leading global customer of Russian oil.
India is the world’s fourth-largest economy and one of America’s top trading partners — the U.S. imported $87.3 billion worth of Indian goods in 2024, according to data from the Office of the U.S. Trade Representative. The 50 percent U.S. tariff that went into effect in August was among the highest levied by Trump on any country; the new 18 percent figure would be slightly more favorable than the rates imposed on India’s archrival Pakistan (19 percent), as well as Vietnam and Bangladesh (20 percent), regional competitors in manufacturing.
While key details about the deal remain unclear, it represents a “much-needed boost” for Washington and New Delhi, said Michael Kugelman, a senior fellow for South Asia at the Atlantic Council.
“Happy days may not yet be here again for the relationship,” he said. “But this is still its most promising development after nearly a year of strain.”
The announcement comes almost a year to the day after Modi met with Trump in the Oval Office and the leaders pledged to increase trade to $500 billion by 2030.
“In the language of America, it’s ‘Make India Great Again’ — MIGA,” Modi said at the White House in February 2025. “When America and India work together, this MAGA plus MIGA becomes a ‘mega partnership for prosperity.’”
Behind the bonhomie, however, there were already signs of tension. For years, Trump had called India a “big abuser” of tariffs. Indian officials had long been reluctant to make trade concessions in the agriculture, dairy and seafood sectors, which, taken together, employ a majority of the country’s workforce.
India’s military confrontation with Pakistan in May introduced another irritant. Trump repeatedly claimed that he helped solve the crisis, annoying Indian officials who denied a White House role. Pakistan, meanwhile, thanked the president for helping and nominated him for the Nobel Peace Prize.
When Trump announced he was targeting India with an additional tariff for buying Russian oil, his top advisers went on the offensive. Peter Navarro said that Russia’s conflict with Ukraine was “Modi’s war” and that New Delhi had become a “laundromat for the Kremlin.” U.S. Treasury Secretary Scott Bessent said “some of the richest families in India” were profiting from the conflict in Europe.
A Washington Post investigation found that Reliance Industries, the conglomerate owned by India’s richest man and Modi ally Mukesh Ambani, had bought roughly $33 billion in Russian oil since the full-scale invasion of Ukraine, accounting for roughly 8 percent of Moscow’s crude oil sales during that period. Trump told his negotiators that India would have to scale back its purchases before a trade agreement could be finalized, The Post reported in September.
Under growing pressure from the White House, New Delhi has tried to wean itself off Russian crude in recent months. The country imported 1.2 million barrels per day in December, according to data from the Center for Research on Energy and Clean Air. The figure had fallen below 600,000 barrels per day as of Jan. 15, the data showed.
At a summit hosted by India last week, Canada and Middle Eastern nations pitched the country on new oil, gas and critical minerals deals to satisfy its massive and growing energy needs.
Trump said in his post Monday that India would also purchase more than $500 billion of U.S. energy, technology, agriculture and coal products.
“The relationship between the United States and India has LIMITLESS POTENTIAL!” Sergio Gor, a Trump confidant and the newly arrived U.S. ambassador to India, wrote Monday on X.
His enthusiasm was echoed by S. Jaishankar, the Indian minister of external affairs, who said “this will create more jobs, spur growth and promote innovation in both economies.”
While the agreement is a “huge deal” for both sides, said Mark Linscott, the former assistant U.S. trade representative for South and Central Asian affairs, there is probably still work to be done.
“Don’t expect this to be the end of the negotiations,” he said. “I think there are some loose ends to tie up.”
Natalie Allison in Washington and Karishma Mehrotra contributed to this report.
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