India and the United States finally concluded a landmark trade agreement on Monday, bringing an end to a heated tariff dispute that stretched across a full year. On Monday, US President Donald Trump announced an immediate reduction in reciprocal tariffs on Indian exports to 18% from the previous 25% offering long-awaited relief to Indian exporters. The breakthrough was confirmed following a phone conversation between Trump and Prime Minister Narendra Modi, signalling a major reset in bilateral trade relations after months of tense exchanges.
Months of intense negotiations
The deal came after rigorous back-and-forth discussions between senior envoys of both nations. The negotiations, which started with cautious optimism in early 202, evolved into a sustained diplomatic effort that finally bore fruit in February 2026.
Here is a month-wise timeline of key events leading up to the trade deal:
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February 2025: PM Modi's Washington visit
Prime Minister Modi's visit to Washington laid the groundwork for a limited pact by autumn 2025. Both sides set a vision to boost bilateral trade to 500 billion dollars by 2030, and India also committed to expanding energy purchases from the US.
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March 2025: Bilateral talks pick up
Commerce Minister Piyush Goyal held talks in Washington with Commerce Secretary Howard Lutnick and USTR Jamieson Greer, followed by American officials travelling to Delhi. While India projected steady progress, the USTR's report highlighted tariffs, data rules and patent concerns.
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April 2025: First signs of momentum
During US Vice President JD Vance's visit, India and the US finalised terms of reference, raising expectations that a deal could be signed before July 9.
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May 2025: Negotiations move forward
Commerce Minister Piyush Goyal returned to Washington with chief negotiator Rajesh Agrawal, reiterating that both sides were closing in on an agreement.
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June 2025: Frictions and diplomatic roadblocks
Despite Trump saying a "big" deal was coming soon, talks reportedly hit a snag over import duties on agricultural products. PM Modi told in a rally that he had declined Trump's invitation to Washington.
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July 2025: Stance hardens
Indian negotiators returned home without progress. Goyal emphasised that India would not rush into deals at the cost of national interest. On July 31, Trump slapped 25 per cent tariffs on Indian imports and warned of more penalties linked to Russian oil purchases.
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August 2025: Tensions peak
Tariffs escalated sharply as Trump imposed an additional 25 per cent penalty on Indian exports over Russian oil imports, taking total duties to 50 per cent. This escalation also carried threats of similar action against BRICS countries still purchasing Russian crude.
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September 2025: A softer tone
Trump later adopted a more conciliatory approach, claiming he would soon speak with the Indian Prime Minister. Meanwhile, PM Modi echoed this optimism and described the US as a “close friend and natural partner.”
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October 2025: Controversial call claim
Trump publicly claimed PM Modi assured him that India would halt Russian oil imports, calling it "a big step." However, India rejected this statement, stressing that national interest guides its energy choices.
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November 2025: Quiet diplomacy
Talks continued behind closed doors with no major public announcements.
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December 2025: Real conversations begin
PM Modi confirmed he had a "very warm and engaging" phone call with Trump. He said both leaders discussed "regional and international developments" as negotiations progressed in Delhi.
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January 2026: US envoy confirms momentum
New US envoy Sergio Gor stated that negotiations were advancing steadily and both countries were closing in on a deal.
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February 2026: Trade deal sealed
The long wait ended when President Trump declared that the two countries had "agreed to a trade deal", triggering an immediate tariff cut to 18%. The move marks a significant easing of trade tensions and offers Indian exporters a major tariff reprieve. Prime Minister Modi said he was delighted that "Made in India products will now have a reduced tariff of 18 per cent". "Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18 per cent. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement," he added.
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