In a significant development for global trade relations, US President Donald Trump announced a new trade agreement with Indian Prime Minister Narendra Modi. The deal, which emerged from a recent phone conversation, involves reducing US tariffs on Indian goods from 25% to 18%. Modi expressed his delight about reaching this agreement via a post on X.
As part of the agreement, India has committed to ceasing its purchase of Russian oil and will also reduce trade barriers to zero. Additionally, Trump noted that a 25% tariff penalty imposed for India's refusal to stop buying oil from Russia will be lifted. The agreement signifies a concerted effort to strengthen economic ties between the two nations, especially following India's recent landmark trade deal with the European Union.
Trump outlined that the deal would involve India purchasing over $500 billion worth of American products, covering various sectors including energy, technology, agriculture, and coal. This collaboration comes as US and Indian exports have been closely watched, particularly after previous tariffs strained trade relations.
In a post on Truth Social, Trump elaborated on the agreement and its implications, saying it was an immediate response to Modi's requests, which also included discussions surrounding the Russia-Ukraine war. Modi thanked Trump in his post, highlighting the mutual benefits of cooperation between two of the world's largest democracies.
Despite the optimism surrounding the agreement, there are critical voices regarding the tariffs. A coalition of US small businesses expressed concern that while the deal reduces tariffs to 18%, it locks in rates much higher than they experienced before Trump's tariff policies were enacted.
As the trade landscape continues to evolve, both nations stand to benefit significantly from this renewed partnership, bolstering economic resilience amid a rapidly changing global environment.
