US-India Trade Deal: Tariffs Capped at 18% in Major Reset of Economic Relationship

After nearly a year of tariff threats, suspensions, and last-minute brinkmanship,Washingtonand New Delhi have finally hit pause on a trade fight that was starting to hurt on both sides. On Monday, US President DonaldTrumpannounced a US–India trade deal that sharply lowers tariffs on Indian exports and resets the tone of one of America’s most strategically important economic relationships. The headline number is hard to miss: tariffs on Indian goods, which had climbed as high as 50%, will now be capped at 18%. The announcement, posted on Trump’s Truth Social platform, followed a phone call with Indian Prime Minister Narendra Modi and immediately drew attention from global markets. But beyond the relief rally, the deal raises bigger questions. Why did talks drag on for so long? Which sectors stand to gain the most? And how does India’s new tariff position compare with other Asian exporters competing for access to the US market? At its core, the agreement ends months of escalating tariffs that had created uncertainty for exporters, investors, and supply chains. According to Trump’s statement, the US will: