US and India Strike Major Trade Deal Following Trump-Modi Call, Tariff Slashed

Washington. A significant trade agreement has been reached between the two nations following a telephone conversation between US President Donald Trump and Indian Prime Minister Narendra Modi. Trump announced the trade deal via his social media platform 'Truth Social,' stating that the tariff imposed on Indian goods would be reduced from 25 percent to 18 percent.

The most crucial aspect of this agreement is India's decision to cease the purchase of Russian oil. According to Trump, Prime Minister Modi has agreed to purchase more oil from the US as an alternative to Russian oil, and potentially import oil from Venezuela as well. The additional 25 percent punitive tariff imposed by the US on Delhi for purchasing Russian oil will now also be lifted.

• Commitment to Purchase Over $500 Billion in US Goods

President Trump expedited this trade deal immediately at the request of Prime Minister Modi. Under the agreement, India has committed to purchasing goods worth over $500 billion from the US, including energy, technology, agriculture, and coal. Furthermore, India has assured that it will reduce its trade barriers to zero.

Trade relations between the two countries had cooled after the Trump administration increased tariffs on Indian goods by up to 50 percent last August. Due to this, India recently concluded a historic trade agreement with the European Union. This new agreement with the US now appears set to strengthen America's hold in the South Asian market again.

Prime Minister Modi thanked Trump via the social media platform 'X,' stating that this agreement would benefit the people of both countries and open doors of opportunity. He welcomed Trump's announcement on behalf of the 1.4 billion Indian people.

However, within the US, the small business group 'We Pay The Tariff' has criticized the deal. According to them, before Trump's policy, the average tariff on goods coming from India was only 2.5 percent, and they view the reduction to 18 percent as a permanent tariff increase. Following Trump's announcement, the US stock market showed a positive reaction.

BBC