India-US trade deal: Timeline of negotiations, tariffs and turning points
New Delhi, Feb 3, 2026
After the US imposed 50 per cent tariffs, Prime Minister Narendra Modi said India would "never compromise" on the interests of farmers, livestock rearers and fishermen
India and the United States on Monday finalised the long-awaited trade deal that cuts tariffs on Indian imports from 25 per cent to 18 per cent.
In a post on X late Monday, Prime Minister Narendra Modi said, “Wonderful to speak with my dear friend President Donald Trump today. Delighted that Made in India products will now have a reduced tariff of 18 per cent.”
His response came after Trump announced the trade deal on his Truth Social platform and said that India would stop purchasing Russian oil, which was among the key pressure points in the trade negotiations.
Here’s how the talks unfolded over the past year and the turning points in negotiations.
February 2025
Prime Minister Modi visited Washington on February 13, 2025, where both sides agreed to work towards a limited trade deal by autumn 2025. They also set an ambitious target to expand bilateral trade to $500 billion by 2030. Modi committed to increasing India’s purchases of US energy.
March 2025
Commerce and Industry Minister Piyush Goyal travelled to Washington and met US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer. American officials later visited Delhi for further talks. While India said progress was being made, the US flagged concerns over high tariffs, non-tariff barriers, data rules and patent issues.
April 2025
On April 2, the US marked “Liberation Day” by unveiling a broad tariff plan that imposed 26 per cent duties on Indian goods. Soon after, Washington announced a 90-day pause on reciprocal tariffs to allow negotiations.
During US Vice President JD Vance’s visit to India on April 16, both sides finalised the terms of reference for trade talks. Indian officials indicated a deal could be signed before the July 9 deadline.
May 2025
Goyal went to Washington along with chief negotiator Rajesh Agrawal. New Delhi said an agreement was within reach, signalling confidence that talks were moving in the right direction.
July 2025
Indian negotiators returned from Washington without a breakthrough. On July 31, Trump imposed a 25 per cent tariff on Indian imports and warned of additional penalties for countries buying Russian oil.
August 2025
The US imposed an additional 25 per cent penalty linked to India’s Russian oil purchases, taking total tariffs on Indian exports to 50 per cent.
September 2025
Trump said negotiations were continuing and that he would speak to Modi soon. Both sides maintained that ties remained friendly despite trade tensions.
December 2025
Modi said he had a “very warm and engaging” phone call with Trump, during which they discussed regional and global developments.
January 2026
Newly-appointed US envoy to India Sergio Gor said both countries were actively engaged and moving closer to a trade agreement.
February 2026
Trump and Prime Minister Modi announced the trade deal on February 2, marking the end of nearly a year of negotiations.
What were the main points of contention?
After the US imposed 50 per cent tariffs, Prime Minister Modi said India would “never compromise” on the interests of farmers, livestock rearers and fishermen, even if it meant paying a “heavy personal price”. Talks had reportedly stalled mainly over import duties on agricultural goods.
The US, on the other hand, accused India of funding Russia’s war in Ukraine through oil purchases and of not buying enough American products, especially oil.
What finally changed to unlock the deal?
In his latest post, Trump said Modi agreed to stop buying oil from Russia and instead increase purchases from the US and possibly Venezuela. He said this would help efforts to end the Ukraine war.
Under the deal, the US reduced tariffs on Indian goods to 18 per cent, while India agreed to cut tariffs and non-tariff barriers on US products to zero. India also committed to buying over $500 billion worth of US energy, technology, agricultural products, coal and other goods, Trump said.
[The Business Standard]
