Prime Minister Narendra Modi on Monday confirmed that India and the United States reached a consensus on a long-pending trade deal after US President Donald Trump announced the reduction of reciprocal tariffs.

Both countries made a formal announcement after the two leaders had a telephonic conversation on Monday night. Taking to X, the Prime Minister lauded the deal, saying that Made in India products will now have a reduced tariff of 18 per cent.

He 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. 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," he added.

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PM Modi's post marked India's formal announcement, confirming the trade deal, after Trump announced to reduce tariffs to 18 per cent. In a Truth Social post, Trump said, "Agreed to a Trade Deal... whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%."

Trump further added that New Delhi also agreed to stop buying Russian oil and buy more from the US and potentially Venezuela.

How did trade tensions escalate between the two countries? A timeline 

On April 2, 2025, the US imposed a 26 per cent "reciprocal tariff" on several Indian imports on its global "liberation day."

On April 10, Trump paused the tariffs for 90 days and maintained a 10% duty on all US imports.

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Later on July 31, trade sustained another hit as Trump announced a 25% tariff on all Indian goods and said it would levy a penalty if India continued to buy Russian oil.

On August 7, the tariff was finally boosted to 50% on Indian goods being shipped to the US, citing India's continued purchase of Russian oil. The tariff on Indian goods was the highest among the US trade partners.

(With inputs from agencies)