India, Feb. 3 -- The United States on Monday announced a sharp cut in tariffs on Indian goods, lowering duties to 18% from as high as 50%, in what both sides described as a breakthrough trade understanding between President Donald Trump and Prime Minister Narendra Modi.

The move follows a phone conversation between the two leaders and signals a reset in trade relations after months of strain triggered by Washington's punitive duties on Indian exports.

President Trump said the decision was taken "out of friendship and respect" for Prime Minister Modi, adding that India had agreed to reduce trade barriers, curb purchases of Russian oil and significantly increase imports from the United States.

According to U.S. officials, Washington will...