Washington/Delhi: The United States and India have reached a landmark trade agreement, easing months of economic tension between the two countries, US President Donald Trump announced Monday.
Under the deal, Trump will reduce the 25% tariff on Indian goods to 18% after Prime Minister Narendra Modi agreed to halt India’s purchases of Russian oil. The US will also remove the extra duties imposed earlier in response to those Russian oil imports. Overall, tariffs on key Indian exports including textiles, machinery, and other goods will fall from 50% to 18%, providing significant relief to Indian exporters.
Trump hailed the agreement as a milestone in US-India relations, tweeting that the two nations would move toward eliminating tariffs and non-tariff barriers and that India would purchase more than $500 billion worth of American energy, technology, agricultural, coal, and other products. Modi confirmed the pact, noting that “Made in India products will now have a reduced tariff of 18%.”
The announcement sparked a rally in Indian markets, with Nifty 50 futures surging nearly 4% and the rupee gaining 1% against the dollar in offshore trading. Analysts called the deal a “win-win,” easing uncertainty for investors while strengthening bilateral trade ties.
The agreement comes after months of strained relations, following high US tariffs on Indian goods and disagreements over Russian oil purchases. India has taken steps to scale back its Russian crude imports, while trade talks between the two nations have now resumed on a positive note.
The deal also has global implications, signaling a shift in the international oil market. India, once a major buyer of Russian crude, has reduced shipments to the lowest levels in over three years, adding pressure to Moscow’s oil exports and contributing to an expected global oversupply.
