A New Dawn: US Slashes Tariffs on India to 18% in Historic Trade Deal

In a landmark decision that promises to reshape the economic corridor between two of the world’s largest democracies, the United States has officially announced a dramatic reduction in tariffs on Indian goods, slashing rates from 50% down to just 18%.

The announcement, confirmed exclusively by US Ambassador to India Sergio Gor, signals what he calls a “new era of India-US relations,” driven by the personal rapport between Prime Minister Narendra Modi and US President Donald Trump.

A Diplomatic Breakthrough

Speaking in an exclusive interview with CNN-News18, Ambassador Gor credited the breakthrough entirely to the leadership at the top. “All the credit goes to President Trump and PM Modi,” Gor stated. “The two leaders have a great personal relationship, which has carried the deal forward.”

This move is expected to significantly boost Indian exports to the US, lowering costs for American consumers while opening wider avenues for Indian manufacturers.

The Russian Oil Pivot

Perhaps the most geopolitically significant component of this deal involves the controversial tariffs related to Russian energy. Previously, the US had imposed a punitive 25% levy on India as a penalty for purchasing Russian oil.

Ambassador Gor confirmed that under this new agreement, that punitive charge is effectively scrapped. “That is correct,” Gor affirmed when asked about the removal of the levy.

“Part of the agreement is that all nations around the world stop buying oil from Russia in order to bring peace to the situation,” Gor explained. “I know the Prime Minister deeply cares about bringing peace in the conflict, as does President Trump.”

What This Means for India

This agreement does more than just lower taxes; it removes a major friction point in India’s foreign policy—its energy dependence on Russia. By aligning closer with US energy and trade interests, India secures:

• Immediate Economic Relief: A sharp drop in export duties.
• Strategic Alignment: Strengthened defense and energy partnerships with Washington.
• Global Standing: A confirmation of India’s pivotal role in the US Indo-Pacific strategy.

As negotiators finalize the fine print, the headline number remains clear: 18%. For Indian businesses, this number represents not just a tax cut, but an open door to the American market.