U.S. President Donald Trump announced a new trade deal with India that includes a significant reduction in U.S. tariffs on Indian products from 50% to 18%. In return, India has agreed to lower trade barriers, halt its purchases of Russian oil, and consider buying oil from the U.S. and potentially Venezuela. This agreement was made following a discussion between Trump and Indian Prime Minister Narendra Modi.
As part of the deal, the U.S. will reduce its reciprocal tariff from 25% to 18%. Additionally, the U.S. will revoke a 25% duty on all imports from India related to Russian oil purchases. Modi has pledged to purchase over $500 billion worth of U.S. energy, technology, agricultural, and other goods.
India heavily relies on oil imports, with about 90% of its needs being met through imports. The country has started to decrease its purchases from Russia, with projected declines in the coming months. These changes come as Indian markets have been impacted by the tariffs imposed by the U.S., leading to significant outflows of foreign investors.
The trade deal has led to a positive response in the stock market, with shares of major Indian companies showing gains. Prime Minister Mark Carney is set to visit India in the near future, aiming to strengthen economic ties between the two countries and explore new trade opportunities.
The agreement between the U.S. and India follows a period of intense trade negotiations, including previous tariff increases by Trump. The potential for India to purchase Venezuelan oil is being considered to offset the reduction in Russian oil imports. This deal marks a significant development in the trade relationship between the two nations.