Made in India Products to Get Reduced 18% US Tariff After Modi–Trump Talks

 

Prime Minister Narendra Modi and US President Donald Trump discussing India–US trade cooperation and tariff reduction on Made in India products.


Prime Minister Narendra Modi has announced that Made in India products exported to the United States will now face a reduced tariff of 18%, marking a significant development in bilateral trade relations between the world’s two largest democracies. The announcement followed a conversation between Prime Minister Modi and US President Donald Trump, after which both leaders shared details through social media posts.

The reduction brings down the earlier reciprocal tariff rate of 25% to 18%, a move that is expected to provide relief to Indian exporters while reinforcing economic cooperation between India and the United States.

Announcement After High-Level Talks



Prime Minister Modi shared the update after speaking with President Trump, describing the interaction as “wonderful” and referring to the US President as a “dear friend.” In his message, the Prime Minister underlined the broader significance of cooperation between India and the United States, noting that when two large economies and leading democracies work together, it creates opportunities that benefit people in both countries.

The Prime Minister also emphasized that such collaboration has the potential to unlock mutually beneficial outcomes across trade, investment, and economic growth.

US Confirms Reduced Reciprocal Tariff



US President Donald Trump confirmed the tariff reduction in a separate social media post, stating that the United States and India had agreed to a Trade Deal under which the US would apply a reduced reciprocal tariff of 18% on Made in India products. He added that the relationship between the two countries would grow even stronger in the coming period.

President Trump described India as a key partner and highlighted the importance of strengthening economic ties with New Delhi as part of a broader strategy to deepen cooperation with trusted global partners.

Personal Diplomacy and Political Signaling


President Trump also spoke warmly about Prime Minister Modi, calling him one of his greatest friends and a powerful and respected leader of India. He noted that both leaders share a results-oriented approach, suggesting that the agreement reflected decisive leadership on both sides.

While such remarks reflect personal diplomacy, analysts note that the tariff reduction also aligns with broader trade negotiations aimed at rebalancing tariffs while maintaining stable commercial flows between the two economies.

What the Tariff Reduction Means for India

The reduced tariff is expected to improve price competitiveness for Indian goods in the US market. Sectors such as manufacturing, engineering goods, textiles, auto components, and select consumer products could see indirect benefits as lower tariffs ease cost pressures for exporters.

For India’s manufacturing ecosystem, the announcement reinforces the global relevance of the “Made in India” push, particularly at a time when supply chain diversification and export-led growth remain policy priorities.

Implications for India–US Trade Relations

India and the United States share a growing trade relationship, with bilateral trade spanning goods, services, technology, and defense. The tariff reduction signals a willingness on both sides to address trade frictions through negotiation rather than escalation.

Trade experts see the move as part of a broader effort to maintain momentum in India–US economic engagement, especially amid evolving global trade dynamics and increased emphasis on trusted economic partnerships.

A Step Toward Deeper Economic Cooperation

While the reduced tariff does not represent a comprehensive free trade agreement, it is viewed as a pragmatic step toward smoother trade flows. It also reflects continued political engagement at the highest level, which has often played a role in advancing India–US relations.

As both governments continue discussions on trade and economic cooperation, the latest announcement adds to a series of measures aimed at strengthening long-term commercial ties between New Delhi and Washington.

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