U.S. President Donald Trump announced on Monday that Washington and New Delhi had reached a trade agreement reducing U.S. tariffs on Indian goods to 18 percent from 50 percent, Reuters reported. 

The deal links tariff relief to India ending purchases of Russian oil and lowering trade barriers.

Trump disclosed the agreement on social media following a call with Indian Prime Minister Narendra Modi, noting that India would increase purchases of U.S. oil and potentially Venezuelan crude. A White House official told Reuters that the United States would rescind a 25 percent punitive duty on Indian imports tied to Russian oil purchases, previously applied on top of a 25 percent “reciprocal” tariff.

U.S.-listed Indian companies reacted positively, with Infosys closing 4.3 percent higher, Wipro rising 6.8 percent, and HDFC Bank up 4.4 percent. The iShares MSCI India exchange-traded fund gained three percent, supporting broader gains in semiconductor and artificial intelligence stocks.

Trump said Modi had committed India to expand purchases of more than 500 billion US dollars of U.S. energy, including coal, along with technology, agricultural and other goods. He added that India would move toward eliminating tariff and non-tariff barriers on U.S. exports.

Key details remain unclear. Reuters reported that Trump’s post did not specify when the lower tariffs would take effect, deadlines for ending Russian oil imports, or which U.S. products India would buy. By late Monday, the White House had not issued the formal notices required to implement the changes.

The deal would bring India’s tariffs closer to those of other Asian economies, economist Madhavi Arora told Reuters, easing pressure on exports and the rupee. Indian markets have been among the worst-performing emerging markets in 2025, with record foreign investor outflows since U.S. tariff hikes.

Reactions from U.S. business groups were mixed. The U.S. Chamber of Commerce described the announcement as progress toward a market-opening agreement, while a coalition of small businesses said the higher tariffs on Indian imports represented a steep increase compared with 2024 levels.

Modi welcomed the deal in a social media post, thanking Trump for the reduced tariffs on Indian-made goods. India’s trade minister, Piyush Goyal, said the pact would strengthen economic ties and expand opportunities for farmers, small businesses, and skilled workers, while facilitating technology transfer from the U.S.