- India and the US agreed to cut reciprocal tariffs from 25% to 18% in a landmark deal
- PM Modi and US President Trump held multiple talks from Feb 2025 to Feb 2026 to finalize deal
- Trade talks faced hurdles over tariffs, farm goods, and Russian oil purchase issues during 2025
India has sealed a ground-breaking trade deal with the United States wherein reciprocal tariffs on New Delhi have been slashed to 18% from 25% earlier, US President Donald Trump announced on his social media platform Truth Social on Monday.
The deal was cracked after months of rigorous negotiations between envoys of both the countries.
Here is a month wise breakdown of key events leading up to the trade deal:
February 2025: PM Modi Visits Washington
Prime Minister Narendra Modi agreed to work toward a limited trade deal by autumn 2025 and to expand bilateral trade to $500 billion by 2030. He also pledged to increase India's energy purchases from the United States.
March 2025: Bilateral Talks Gain Momentum
Union Minister of Commerce and Industry, Piyush Goyal, visited Washington and met Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer. US officials travelled to Delhi for further discussions. India said negotiations were progressing well even as the USTR's annual report flagged India's high tariffs, non-tariff barriers, data rules and patent issues.
April 2025: Early Signs Of A Breakthrough
During US Vice President JD Vance's visit, both sides finalised the terms of reference for the talks. Indian officials said that a deal could be signed before the July 9 deadline.
May 2025: Talks Advance Further
Goyal returned to Washington with lead negotiator Rajesh Agrawal for more discussions. New Delhi expressed confidence that an agreement was within reach.
June 2025: Mixed Signals
On June 3, US Commerce Secretary Howard Lutnick said both nations were making progress and a deal could be finalised soon. Trump also declared that a “big” trade deal with India was coming.
But Indian officials told Reuters that talks had hit a roadblock over import duties, particularly on farm goods. At a rally in Odisha on June 20, PM Modi said he had declined Trump's invitation to Washington.
July 2025: Hardening Of Stance
The Indian delegation returned from Washington without a breakthrough. On July 4, Goyal said India would not rush into trade deals merely to meet deadlines and stressed that national interest would remain “supreme.”
A fifth round of talks was held in mid-July to break the deadlock. On July 31, Trump imposed 25% tariffs on Indian imports and warned of further penalties for countries purchasing Russian oil.
August 2025: Tensions Escalate
After imposing a 25% tariff on Indian exports with an additional penalty of 25% for purchasing Russian Oil, rounding up the total to a whopping 50%. This came despite ongoing negotiations and was further compounded by threats of additional tariffs targeting BRICS nations, particularly those still purchasing Russian oil — including India.
September 2025: Signs Of A Reset
Trump said his administration was continuing negotiations to address trade barriers with India and that he would speak to Modi soon. In a marked shift of tone, he expressed optimism that the two sides could finalise a trade deal.
Modi echoed the sentiment in a social media post, calling Washington and New Delhi “close friends and natural partners,” and said teams from both countries were working to conclude discussions at the earliest.
October 2025: Trump Makes Phone Call Claims
Trump claimed that he had a cordial phone call with Prime Minister Modi wherein PM Modi assured him India would stop purchasing oil from Russia, describing it as “a big step” toward increasing global pressure on Moscow. Although, the Indian External Affairs Ministry denied all claims and said its energy decisions are guided by national interest
November 2025: Talks Still Underway
November was a quieter month on the trade deal front, as negotiations advanced but nothing concrete was revealed by either side.
December 2025: Actual Phone Call Takes Place
PM Modi announced that he had a phone call with Donald Trump in December. He said they had a “very warm and engaging” phone call with US President Donald Trump as India trims Russian crude imports and a US trade delegation in Delhi continues protracted discussions on a bilateral deal.
Modi posted on social media that the two leaders had discussed “regional and international developments”. There was no immediate confirmation or readout from the White House or from Trump.
January 2026: US Envoy Says Discussions Underway
Newly appointed US envoy to India Sergio Gor announced that both countries are actively engaged in dialogue and inching closer to a trade agreement.
February 2025: Trade Deal Clinched
US President Donald Trump announced that India and the United States have "agreed to a trade deal", which will reduce the reciprocal tariffs on Indian imports to 18% from 25%.
The trade deal will be "effective immediately", Trump said, signalling immediate tariff relief for India.
"Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a trade deal between the United States and India, whereby the United States will charge a reduced reciprocal tariff, lowering it from 25% to 18%. They will likewise move forward to reduce their tariffs and non-tariff barriers against the United States, to zero," he said. Trump's statement came shortly after a phone call with Modi.
What began in February last year has circled fully to reap a fruit exactly after 12 months. The deal is a landmark announcement for India and its biggest trading partner United states.
ALSO READ: India, US 'Agreed' To Trade Deal; Reciprocal Tariffs Slashed To 18%: Trump After Modi Phone Call
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