UPDATE FEB. 10: An Executive Order signed Feb. 6 eliminates the additional 25% tariff imposed as a penalty for India’s purchases of Russian oil, as of 12:01 a.m. Eastern on Feb. 7. Importers may be eligible for refunds of duties already paid.

Nearly a year after President Donald Trump and Indian Prime Minister Narendra Modi agreed to negotiate a new trade deal, the former announced on Feb. 2 that an agreement has come to fruition.

Under the deal, the United States will charge India with a reduced reciprocal tariff, lowering the rate from 25% to 18%, Trump said in a post on Truth Social. “They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO,” Trump added.

Modi confirmed the deal in a post on X, saying, “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”

Both world leaders took to social media to share the news immediately, and The White House released a fact sheet with details of the agreement on Feb. 9.

  • Trump also claimed that India had agreed to stop buying Russian oil. In exchange, the U.S. will lift a separate 25% tariff it imposed on Indian goods over its Russian oil purchases, a White House official confirmed to Politico.


On the surface, the announcement seems like promising news for the promotional products industry, which relies upon India as a major hub for product sourcing. Last May, 43% of PPAI 100 suppliers reported they’re using India as a sourcing alternative from China, according to PPAI Research.

‘Mother Of All Deals’

The announcement comes one week after India and the European Union closed a “landmark” free trade agreement, which Modi called the “mother of all deals.”

Last month, Trump threatened that any country with economic ties to Iran (which includes India) could face a 25% tariff on goods exported to the U.S.

No executive order authorizing the tariffs has been issued yet, but any such tariff would likely be enacted under the same International Emergency Economic Powers Act that Trump has used for similar levies. The president’s authority to do so has been challenged, however, with a decision from the U.S. Supreme Court expected as soon as this month.