In a much-awaited breakthrough that promises to end months of acrimony in India-US relations, US President Donald Trump has announced a trade deal with India, reducing reciprocal tariff from 25% to 18%, providing a breather to US-bound Indian exports.
Trump’s comments came after his telephonic conversation with Prime Minister Narendra Modi on February 2.
PM Modi promptly welcomed the new trading arrangement with US and thanked President Trump “on behalf of the 1.4 billion people of India for this wonderful announcement.” “Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%,” PM Modi said on X.
“When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”
The deal has reduced 50 per cent tariffs on Indian exports to 18 per cent. It will provide relief to nearly one-third of India’s exports to the US, which were adversely impacted after Washington imposed 50 per cent tariff, including additional penalty for purchasing Russian oil.
According to President Trump, PM Modi “agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela.”
“This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week,” President Trump announced on Truth Social.
Under the deal, according to Trump, India will move forward to reduce their Tariffs and Non-Tariff Barriers against the United States, to zero. “The Prime Minister also committed to “BUY AMERICAN,” at a much higher level, in addition to over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products,” said President Trump.
“Our amazing relationship with India will be even stronger going forward,” he said.
The India-US trade deal will provide relief to nearly one-third of India’s exports to the US, which were adversely impacted after Washington imposed 50 per cent tariff, including additional penalty for purchasing Russian oil.
The India-EU trade deal, which was unveiled only a week ago, acted as a trigger for Trump to end months of vacillation and announce the big deal that will pave the way for resetting India-US relations.
“As I have said many times, President Trump genuinely considers Prime Minister Modi a great friend! Thrilled by the news of the trade deal this evening. The relationship between the United States and India has LIMITLESS POTENTIAL!” said Sergio Gor, US’ Ambassador to India, on X. Gor played a pivotal role in accelerating trade negotiations between the two sides.
Author Profile
- Manish Chand is Founder and Editor-in-Chief of India Writes Network (www.indiawrites.org) and India and World, a pioneering magazine focused on international affairs. He is CEO, Centre for Global India Insights, an India-based think tank focused on global affairs.
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