The tariff war is over! Indian goods will become cheaper in the US, and discussions are underway on the dairy and agriculture sectors
India and the United States have finalized a trade deal framework that will significantly reduce tariffs and boost economic cooperation. The deal includes a commitment by India to purchase $500 billion worth of US goods over the next five years, and further negotiations are planned for a comprehensive bilateral trade agreement.
India and the United States on Friday took a significant step forward, announcing a framework for an India-US trade agreement that aims to reduce tariffs, strengthen energy ties, and boost economic cooperation.
A joint statement from the two governments confirmed that while the framework paves a clear path, further negotiations will be needed to finalize a comprehensive bilateral trade agreement.
Tariff reduced
US President Donald Trump announced earlier this week that the US would reduce tariffs on Indian goods from 50% to 18% under the India-US trade agreement.
In return, India would have to stop buying Russian oil and reduce trade barriers. Half of the 50% tariff was imposed as a measure against India's Russian oil imports, which Trump said were supporting Moscow's war efforts in Ukraine. On Friday, Trump signed an executive order removing 25% of the tariffs. India has agreed to import oil from the US and Venezuela.
Key highlights of the India-US deal
The India-US deal includes specific trade commitments. India has agreed to purchase US goods worth $500 billion over the next five years, including oil, gas, coking coal, aircraft and aircraft parts, precious metals, and technology products such as graphics processing units used for AI and other data center applications.
India will reduce or eliminate tariffs on a wide range of US industrial and agricultural products, including dry grains, red sorghum, nuts, fresh and processed fruits, soybean oil, wine, and spirits.