In a significant shift in trade policy, US President Donald Trump has agreed to slash tariffs on Indian imports, reducing them from the current levels to 18%.
According to a report by Al Jazeera, the decision comes as India moves to reduce bilateral trade barriers and ceases oil purchases from Russia in favor of sourcing energy from the United States and potentially Venezuela.
Following a phone call with Indian Prime Minister Narendra Modi, President Trump took to social media to announce the deal.
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"Out of friendship and respect for Prime Minister Modi, and at his request, I have agreed to a trade deal effective immediately," Trump wrote. Under the agreement, the US will lower tariffs from 25% to 18%.
The President further noted that Prime Minister Modi has committed to purchasing over $500 billion worth of American energy, technology, agricultural products, and other goods.
Breakdown of the Tariff Reduction
A White House official told Reuters that the US is not only addressing the 25% reciprocal tariff but is also withdrawing an additional 25% surcharge that had been imposed as a penalty for India's previous purchases of Russian oil.
Diplomatic Reactions
Prime Minister Modi expressed his satisfaction with the development on X (formerly Twitter), stating:
This move marks a major de-escalation in trade tensions. In early August of last year, President Trump had imposed a 25% tariff on Indian goods, which was later increased. At the time, India’s Ministry of External Affairs had characterized the US measures as "inappropriate, provocative, and baseless."
