India-US Trade Deal Live Updates: Tariffs on Indian goods lowered to 18%, formal signing expected soon

The Indian rupee rallied to 90.4 against the US dollar on Tuesday, climbing 1.2 percent after Washington slashed tariffs on select Indian goods from 50 percent to 18 percent, a move that soothed trade tensions and lifted sentiment in currency and equity markets.

The India‑US trade agreement cuts US tariffs on Indian goods to 18% and links tariff relief to India’s commitment to halt Russian oil imports. The deal, described by industry leaders as a major breakthrough, is expected to boost bilateral trade, strengthen strategic ties and open new opportunities for exporters and investors.

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Indian equity markets surged sharply as investors reacted to the newly announced India‑US trade agreement. The BSE Sensex opened around 2,300 points higher and the NSE Nifty jumped about 700 points, driven by optimism that the tariff cut to 18% and improved trade ties will boost corporate earnings and foreign investment.

Analysts say reduced trade barriers and the end of punitive duties have lifted sentiment across sectors, with export‑linked stocks expected to benefit most. This reflation in market confidence comes alongside broader expectations of improved flows into Indian assets following the landmark deal.

Former Assistant US Trade Representative Mark Linscott welcomed the India-US trade deal, calling it a long-awaited milestone. He said the agreement reflects months of work by negotiators on both sides and that direct talks between Prime Minister Modi and President Trump were crucial to finalising it.

• April 2, 2025 – The US imposed a 26% “reciprocal tariff” on several Indian imports as part of its global “liberation day” tariff measures.

• April 10, 2025 – Trump paused the tariffs for 90 days, keeping a 10% duty on all US imports.

• July 31, 2025 – Trump announced a 25% tariff on all Indian goods and warned of penalties if India continued buying Russian oil.

• August 7, 2025 – Tariffs on Indian goods were raised to 50%, the highest applied to any US trading partner, citing India’s ongoing Russian oil purchases.

• February 2, 2026 – Trump announces a trade deal with India, reducing tariffs to 18% in exchange for India halting Russian oil imports and buying more from the US and potentially Venezuela.

The Indian rupee is expected to open sharply higher on Tuesday, supported by hopes that the recently announced India-US trade deal will attract foreign capital and ease hedging pressures.

The 1-month non-deliverable forward indicates the rupee may trade in the 90.15–90.25 range versus the U.S. dollar, after settling at 91.5125 on Monday.

The deal, announced by US President Donald Trump following a call with Prime Minister Narendra Modi, dismantles a punitive tariff system that had pushed duties on Indian exports to 50%, the highest in Asia. By removing penalties related to India’s Russian energy purchases and lowering reciprocal tariffs to 18%, foreign capital inflows are expected to return, following record equity outflows in 2025.

“The trade deal removes a chunk of policy and tariff uncertainty that had been weighing on Indian assets, opening the door for a near-term bounce in the rupee and equities via sentiment and foreign flows,” said Marc Velan, head of investments at Lucerne Asset Management in Singapore.

The rupee was the worst-performing Asian currency in 2025, declining nearly 5% for the year and more than 2% last month, highlighting the significance of renewed investor confidence.

India-US relations reached a milestone with the signing of a trade deal that reduces tariffs to 18%, setting the stage for enhanced trade, investment, and mutual economic growth.

Home Minister Amit Shah welcomed the agreement, calling it a “historic step that will benefit both nations and strengthen our strategic partnership.”

The deal is expected to boost exports of Made in India products to the US and strengthen collaboration in technology, energy, and other key sectors, cementing the partnership between the world’s two largest democracies.

Capitol Hill veteran and commentator Anang Mittal said, “I think the biggest factor has to be the installation of Ambassador Sergio Gor. He is a close confidant of President Trump, and I think he made it clear that better relations with India were ahead. Many of the Indian ministers had been coming over to America. There was a lot of back-and-forth shuttling of officials and diplomats, and it still hasn’t been finalised, but it’s very obvious that a reset in relations is in the works for this year. It has been months of work. This hasn’t happened overnight.”

Industry leaders and market experts have welcomed the India‑US trade deal that cuts US tariffs on Indian goods to 18 per cent, calling it a historic, win‑win agreement that strengthens bilateral economic ties and boosts market sentiment.

Ashish Chauhan, MD and CEO of the National Stock Exchange, as quoted by ANI, described the tariff reduction as a positive move for global trade and a “big win for businesses, supply chains, and the India‑US partnership.”

Experts said the deal will improve competitiveness for Indian exporters, support equities, and reinforce India’s position in global trade, while noting it aligns with broader efforts to drive economic growth and cooperation.

Prime Minister Narendra Modi expressed his appreciation for the India-US trade deal, thanking President Donald Trump for the agreement and emphasizing its significance for India and global cooperation.

“Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.

When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.

President Trump’s leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace.

I look forward to working closely with him to take our partnership to unprecedented heights,” Modi wrote on X.

Finance Minister Nirmala Sitharaman welcomed the new India-US trade agreement, describing it as positive news for Indian products. She said the reduced tariffs will help ‘Made in India’ goods face lower duties in the United States.

“Good news for #MadeInIndia products. They will now face reduced tariff of 18%. Thanking the leadership of PM @narendramodi and @POTUS for this development. People of our two large democracies stand to benefit,” she wrote on social media.

India’s External Affairs Minister S. Jaishankar has welcomed the new India-US trade deal, describing it as a significant step to boost employment, economic growth, and innovation in both countries.

Jaishankar arrived in New York on Monday for a three-day official visit to attend the Critical Minerals Ministerial hosted by US Secretary of State Marco Rubio.

“This will create more jobs, spur growth and promote innovation in both economies,” Jaishankar wrote on X. He added that the agreement would reinforce “Make in India” initiatives and foster trusted technology collaborations.

He further noted, “A robust economic relationship is the strongest foundation for our strategic partnership.”

The new India–US trade deal cuts tariffs to 18%, placing India among the countries with the lowest US import duties in Asia. Rates are now lower than those for China, Pakistan, Indonesia, Bangladesh, and Vietnam, though still slightly above tariffs applied to European nations, Japan, and South Korea.