A file photo of Prime Minister Narendra Modi shaking hands with US President Donald Trump.
Credit: PTI File Photo
US President Donald Trump announced a landmark trade deal with India late on Tuesday, bringing an end to the ongoing strained relations between the two countries.
Prime Minister Narendra Modi, too, took to social media to announce that reciprocal tariff on Indian goods sold in the US would reduced from 25 per cent to 18 per cent.
With the announcement, four things changed for India and the US overnight.
1. India to buy US oil
According to Trump, India will stop buying Russian oil and will start purchase from the US and potentially Venezuela.
New Delhi had been buying subsidised oil from Moscow ever since Kremlin's war against Ukraine began in 2022.
The US had imposed an additional tariff of 25 per cent as a punitive measure for buying Russian oil, which Trump claimed fuelled the war. According to the White House, this tariff will also be removed following the trade deal.
2. 'Unprecedented opportunities'
Trump also said that the two global powerhouses have agreed upon a trade deal. This comes within a week of New Delhi finalising a Free Trade Agreement with the European Union.
However, full details of the deal are yet to be revealed. India's industry and Commerce Minster Piyush Goyal hinted that the deal will facilitate co-creation of technologies and co-development of solutions.
"This agreement unlocks unprecedented opportunities for farmers, MSMEs, entrepreneurs, and skilled workers to Make in India for the world, Design in India for the world, and Innovate in India for the world. It will help India get technology from the US," he said in a post on X.
3. Non-tariff barrier on US products removed
While the Indian products attract 18 per cent tariff in the US, India will move forward to reduce its tariffs and non-tariff barriers against the United States to zero.
4. India to buy more US goods
Trump also said that India has committed to buy American goods at a "much higher level", in addition to over $500 billion, including US energy, technology, agricultural, coal, and many other products.