US President Donald Trump announced on Monday that he has agreed to a trade deal with Indian Prime Minister Narendra Modi. Under the agreement, the US will reduce tariffs on Indian goods from 25% to 18%.
In a post on Truth Social, Trump said India has agreed to eliminate trade barriers entirely and will stop buying Russian oil. The 25% tariff penalty previously imposed over India’s purchase of Russian oil will also be removed.
The announcement comes less than a week after India and the European Union finalized a landmark trade agreement following nearly two decades of negotiations.
Modi expressed his delight over the deal in a post on X, saying he was pleased that an agreement had been reached.
Trump added that the morning phone call with Modi covered both trade and the Russia-Ukraine conflict. He said Modi agreed to increase oil purchases from the US and possibly Venezuela, and at Modi’s request, he immediately consented to the trade deal. This agreement will see India reduce tariffs and non-tariff barriers to zero.
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Trump further stated that Modi committed to purchasing more than $500 billion worth of American goods, including energy, technology, agriculture, and coal products.
The trade relationship between the US and India had been strained since August, when the US imposed a 50% tariff on Indian goods, the highest on any Asian country, including a 25% penalty tied to Indian oil imports from Russia.
A White House official confirmed that the Russian oil-linked tariffs will be removed and other tariffs reduced to 18% under the new deal.
Modi thanked Trump for the announcement, saying the cooperation between the two largest democracies will benefit their people and open up significant opportunities for mutually beneficial trade.
Indian exports to the US had fallen sharply after the previous tariffs were applied. The recent India-EU trade deal will also reduce tariffs on a wide range of goods and services and includes a joint security partnership.
#With inputs from BBC