U.S. President Trump announced the first-ever U.S.-India trade agreement: India has agreed to eliminate tariffs on U.S. goods.
On May 8, 2025, President Trump announced from the White House that the United States reached its first tariff agreement with India, where India agreed to eliminate import tariffs on American goods. The agreement covers steel, auto parts, and pharmaceuticals, and is based on the principle of reciprocity, allowing the U.S. to export specific products to India without tariffs. This marks the first concrete agreement since the Trump administration initiated its new tariff policy on April 2, signifying a major turning point in U.S.-India trade relations.
Key Updates
05/08 02:32
U.S. President Trump announced the first-ever U.S.-India trade agreement: India has agreed to eliminate tariffs on U.S. goods.
On May 8, 2025, President Trump announced from the White House that the United States reached its first tariff agreement with India, where India agreed to eliminate import tariffs on American goods. The agreement covers steel, auto parts, and pharmaceuticals, and is based on the principle of reciprocity, allowing the U.S. to export specific products to India without tariffs. This marks the first concrete agreement since the Trump administration initiated its new tariff policy on April 2, signifying a major turning point in U.S.-India trade relations.
Trump Announces at Press Conference: India is the First Country to Reach a Trade Agreement
At 10 AM Eastern Daylight Time (EDT) on May 8 (10 PM Taiwan Standard Time), President Trump held a press conference in the Oval Office of the White House to announce a major trade agreement with "an important and respected country." Although Trump did not reveal the country's name in advance on the social platform Truth Social, he clearly identified the country as India during the press conference.
In the press conference, Trump stated: "India's tariffs are some of the highest globally, and we won't tolerate such rates. They've agreed to lower them to zero. They wouldn't do this for anyone else, except for me."
Agreement Details: Zero Tariffs, Quota System, and Reciprocity Principle
According to Bloomberg and multiple media reports, the core content of this agreement includes reducing India's import tariffs on specific U.S. goods to zero, covering items such as steel, auto parts, and pharmaceuticals. The agreement adopts the reciprocity principle, allowing the U.S. to export certain industrial products to the Indian market tax-free, but with a fixed quota, beyond which the original tariffs will still apply.
Informed sources indicated that this proposal was first put forward by Indian trade officials during a visit to Washington in late April, where both parties engaged in intensive negotiations, aiming to formally sign the agreement by the fall of 2025.
Background: Tariff Offensive and Negotiation Pressure
The agreement was reached against the backdrop of a new round of tariff measures initiated by the Trump administration on April 2. At that time, the U.S. imposed a 10% comprehensive tariff on several trading partner countries, including India, and an additional "reciprocal tariff" of up to 26% on some countries. India was among them.
However, shortly after imposing the 26% tariff on India, Trump announced a temporary 90-day exemption in mid-April, reducing India's import tariffs to 10%. This move was seen as leaving room for bilateral negotiations. Now, the agreement signifies a major turning point in U.S.-India trade relations.
Statements and Future Arrangements
Although the Indian government has not yet issued an official statement on the agreement, according to U.S. officials, the Indian government has completed preliminary preparations for related policy adjustments internally. Trump emphasized at the press conference that this agreement is "the first of many agreements," hinting that more trade agreements will be announced in the future.
Additionally, Trump mentioned that this agreement is not only an economic cooperation but also a reflection of the strategic partnership between the two countries. He stated: "This is a new era for U.S.-India relations, and we will jointly create more jobs, more investment, and a fairer trade environment."
Key Role of the Indian Trade Delegation
It is reported that one of the key factors in reaching this agreement was the high-level consultations conducted by the Indian trade delegation during their visit to the U.S. in late April. The delegation, led by senior officials from the Indian Ministry of Commerce, held multiple closed-door meetings with the U.S. Trade Representative's office (USTR). Both parties engaged in technical consultations on issues such as tariff structures, quota systems, and market access, ultimately reaching a preliminary consensus.
International Observations: Rumors of a UK Agreement and Ongoing Negotiations with Multiple Countries
It is noteworthy that before Trump announced the agreement with India, there was speculation that the first agreement might be with the UK. The New York Times cited three sources indicating that the U.S. and the UK are also negotiating a trade agreement, including reducing UK tariffs on U.S. cars and agricultural products and eliminating the digital tax on U.S. tech companies.
Additionally, the Trump administration is currently negotiating trade agreements with Japan, South Korea, Israel, and Vietnam. According to NPR, the U.S. Treasury Secretary and Trade Representative are expected to meet with Chinese officials in Switzerland this weekend to discuss U.S.-China trade issues.
