The United States and India have recently reached a preliminary trade agreement that includes a substantial reduction in tariffs on Indian imports. Announced on the 7th (local time), this agreement reduces the tariff rate imposed by the US on Indian goods from a previous high of 50% to 18%. This move is part of a broader framework aimed at enhancing mutually beneficial trade relations between the two nations. President Trump had indicated earlier on the 2nd, during a phone call with Indian Prime Minister Narendra Modi, that the mutual tariff would be lowered from 25% to 18%. Henceforth, US tariffs on Indian goods will be significantly less burdensome, signaling improved trade ties.

In conjunction with lowering tariffs, President Trump signed an executive order repealing the previous 25% punitive tariffs on Russian oil imports. The new agreement entails India committing to halt its purchases of Russian oil while promising to increase imports of US energy products. This development also includes a broad commitment from India to eliminate or reduce tariffs on all American manufactured goods, potentially leading to increased trade volumes over the next five years, specifically targeting sectors such as energy, aviation, and technology valued at $500 billion.

Prime Minister Modi welcomed this agreement, noting that it would strengthen resilient and reliable supply chains and contribute to global economic growth. The US and India plan to engage in further negotiations to solidify these trade improvements, aiming for economic cooperation that benefits both parties significantly.