US and India Agree to Cut Tariffs in Trade Deal

According to media reports, the United States and India have moved to ease trade tensions after President Donald Trump and Prime Minister Narendra Modi agreed to a surprise deal to cut tariffs. Under the agreement, the US will lower duties on Indian goods to 18% from 25% and remove an additional punitive tariff linked to India’s purchases of Russian oil.

The announcement boosted market confidence, with India’s currency and stock markets posting their strongest gains in years, as investors welcomed signs of improving economic ties between the two countries.

While many details of the agreement remain unclear and Indian officials have yet to formally confirm all elements outlined by President Trump, the deal is widely expected to support India’s economy. The US is India’s largest export market, and elevated tariffs had weighed heavily on labour-intensive sectors such as textiles, footwear, and jewellery.

Economists say the tariff reduction could encourage fresh investment into India as global companies seek alternatives to China, potentially providing a modest boost to economic growth this year.

The agreement follows months of difficult negotiations that had left India facing some of the highest US tariff rates globally. It also comes shortly after New Delhi signed a major trade deal with the European Union, easing concerns that India was becoming isolated in global trade. Together, the US and EU agreements are seen as strengthening India’s role in global supply chains and restoring momentum to its manufacturing and export ambitions.

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