The United States and India have reached a major trade agreement after a high-level phone call between President Donald Trump and Prime Minister Narendra Modi, marking a significant shift in bilateral economic relations. Trump announced that Washington would reduce tariffs on Indian goods from 25 percent to 18 percent, a move expected to ease trade tensions and revive exports from India to the US.

The deal follows months of friction after the US imposed steep tariffs on Indian products, including an additional 25 percent penalty linked to India’s purchase of discounted Russian crude oil. Under the new arrangement, that separate penalty will be dropped, signaling a reset in trade ties between the two democracies.

Trump said India had agreed to stop buying Russian oil and instead increase its energy purchases from the United States and possibly Venezuela. He claimed that this shift would not only strengthen economic ties but also contribute to efforts aimed at ending the Russia–Ukraine conflict.

According to Trump, Modi also committed to reducing India’s own trade barriers, potentially bringing tariffs and non-tariff restrictions on US goods down to zero. The White House indicated that the agreement would open new opportunities for American exporters in sectors such as energy, technology, agriculture, and coal.

Trump further stated that India had pledged to purchase more than $500 billion worth of American goods in the coming years, describing the deal as one of the most significant trade breakthroughs of his administration.

Modi welcomed the agreement on social media, thanking Trump on behalf of India’s 1.4 billion citizens. He said that deeper economic cooperation between the world’s two largest democracies would create jobs, expand investment, and strengthen strategic ties.

The deal is expected to reverse the sharp decline in Indian exports to the US that followed the earlier tariff hikes, which had hit industries such as textiles, pharmaceuticals, engineering goods, and agricultural products.

The announcement also comes just days after India finalized a landmark trade agreement with the European Union, highlighting New Delhi’s broader strategy to strengthen economic partnerships with major global powers.

Analysts say the US–India trade deal reflects a growing alignment of economic and geopolitical interests, positioning both nations as key partners in global supply chains, clean energy transitions, and technology cooperation in the years ahead.