New Delhi, February 3: Union Minister of Commerce and Industry Piyush Goyal announced on Tuesday that India and the United States are in the final stages of formalizing a landmark trade agreement. The announcement follows a high-level breakthrough where U.S. President Donald Trump committed to reducing reciprocal tariffs on Indian goods from 25% to 18%. Addressing the media, Goyal confirmed that while the broad strokes of the deal have been established, a formal joint statement detailing the specific terms will be released shortly.

Reciprocal Tariffs and the Announcement

Explaining the sequence of the announcement, Goyal noted that since the U.S. had originally imposed the reciprocal tariffs, the initiative for the reduction naturally came from President Trump. The move follows months of trade friction during which Indian exports faced steep duties. “The reciprocal tariff was set by the U.S., and they were the ones who had to reduce it,” Goyal stated. He added that the news of the 18% reduction was a significant development for Indian exporters who have been navigating a challenging global trade environment. India-US Trade Deal a ‘Big Decision’ That Will Benefit Everyone, Says PM Narendra Modi at NDA Parliamentary Party Meet.

Finalizing the Joint Statement

Negotiating teams from both New Delhi and Washington are currently engaged in "legal scrubbing" and finishing the technical processes required to ink the deal. Goyal emphasized that the government is ensuring all sensitive sectors remain protected before the final documents are signed. “The trade deal is in the final stages of detailing. We will be issuing a joint statement by both countries shortly, along with the details of what we will be inking,” the Minister said. He assured that the full text of the agreement would be shared with the public once the technical formalities are completed.

Strategic Shifts and Economic Impact

The deal comes amid reports of a strategic pivot in India’s energy and trade policy. President Trump indicated that the tariff relief—which effectively removes a total 50% burden when including previous penal levies—was tied to India’s commitment to reduce its reliance on Russian oil and increase purchases of American energy and technology. Minister Goyal hailed the agreement as a victory for the "Make in India" initiative, predicting it would unlock massive opportunities for MSMEs, farmers, and skilled workers. Market reaction has been overwhelmingly positive, with the Sensex and Nifty witnessing a sharp rally following the news. ‘No Message From India on Halting Russian Oil Purchases’, Says Kremlin After Donald Trump’s Claim.

‘India-US Trade Deal Details Finalized Soon’

Background and Context

The India-US trade relationship had faced significant strain since mid-2025, when the Trump administration imposed aggressive tariffs citing India's trade surplus and its energy ties with Moscow. By securing an 18% tariff rate, India has managed to gain a competitive edge over regional rivals like Vietnam and Bangladesh, who currently face higher tariff brackets in the U.S. market. This agreement follows closely on the heels of India's recent free trade pact with the European Union, signaling a robust expansion of New Delhi’s global trade footprint.

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(The above story first appeared on LatestLY on Feb 03, 2026 06:20 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).