Following the announcement of a new India–US trade deal on Monday, India has emerged with a clear advantage over its regional export rivals. Under the agreement, the United States has reduced tariffs on Indian goods to 18 per cent, placing India in a stronger position compared to several South and Southeast Asian economies.
Under the revised tariff structure, India now enjoys lower duties than Indonesia, which faces tariffs of 19 per cent, and Bangladesh and Vietnam, both of which are subject to 20 per cent tariffs. The gap is even wider when compared to China, where US tariffs currently stand at a steep 34 per cent. India also holds a slight edge over Pakistan, which faces 19 per cent tariffs on its exports to the US, as per ANI.
Trump–Modi Talks
The development came after US President Donald Trump announced that Washington and New Delhi had finalized a trade agreement. Trump said the reciprocal tariff on India had been cut from 25 per cent to 18 per cent, describing the move as a gesture made “out of friendship and respect” for Prime Minister Narendra Modi. He added that the deal would take effect immediately.
In a post on Truth Social, Trump shared details of his conversation with PM Modi, calling him one of his closest friends and a respected global leader. He also made major claims about India’s energy imports and trade commitments.
Energy and Trade Commitments
“It was an Honor to speak with Prime Minister Modi, of India, this morning. He is one of my greatest friends and, a Powerful and Respected Leader of his Country. We spoke about many things, including Trade, and ending the War with Russia and Ukraine. He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week! 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,” Trump’s post read.
Soon after, Prime Minister Narendra Modi responded on X, welcoming the announcement and thanking Trump for the move, which he said would benefit Indian manufacturers and exporters.
“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,” PM Modi wrote in a post on X.
White House confirms tariff rollback
Meanwhile, a White House official confirmed to ANI that the US would also remove the additional 25 per cent tariff imposed earlier due to India’s purchase of Russian oil. However, the official stressed that the condition was clear.
When asked by ANI whether the tariffs on Indian imports would be lifted in exchange for reducing Russian oil purchases, the official said, “Yes, although the agreement is that India will cease, not just reduce, Russian oil purchases.”
(With Inputs from ANI)
