Prime Minister Narendra Modi on Tuesday exalted virtues of patient diplomacy in India’s foreign policy that managed to land a trade agreement with its biggest partner, the United States.
“The US trade deal has created a positive environment. People were criticising earlier, but we remained patient. That patience has paid off,” Modi told lawmakers of his National Democratic Alliance during a meeting in New Delhi. The world order has been shifting in India’s favour since the Covid pandemic, he added.
The PM said India should advance its manufacturing sector and build quality products that can compete in global markets.
India and the US have agreed to a trade agreement under which reciprocal tariffs on Indian goods will be slashed to 18% from 25% and the additional 25% duty linked to the purchases of Russian crude oil will be eliminated. The trade deal will be “effective immediately”, President Donald Trump said, following a phone call with Modi late Monday, signaling immediate tariff relief for India.
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…
— Narendra Modi (@narendramodi) February 2, 2026
The two sides have been locked in negotiations since early 2025, but the talks derailed after the US slapped tariffs as high as 50% on Indian imports in August. After a brief pause, the negotiations resumed in October, but the two countries could not reach the finish line.
Complicating the setup was Trump’s repeated assertion that he brokered the ceasefire between India and Pakistan during the brief military conflict in May. New Delhi has maintained that it acted on the ceasefire request from Islamabad and not under any foreign pressure.
The stock market joined the euphoria around better trade flows between the two large economies. Rupee appreciated against the dollar and government bond yields fell.
Industry and political leaders have welcomed the India-US trade deal which can deepen supply-chain integration, enable faster technology collaboration, and attract investment into advanced manufacturing.
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