NEW DELHI: Indian Prime Minister Narendra Modi expressed optimism on Saturday regarding a new trade agreement with the United States, stating that it would enhance global economic growth and strengthen the partnership between the two nations.
The deal will reduce the US tariffs on Indian goods from 25 percent to 18 percent, while India commits to purchasing substantial amounts of energy and industrial products from the United States.
US President Donald Trump announced the agreement earlier in the week, noting that Modi agreed to halt the purchase of Russian oil amid the ongoing conflict in Ukraine. This move aims to lessen the tensions that arose over India’s oil imports, which the US believes funding the war.
“Great news for India and the USA!” Modi shared on social media, praising Trump’s dedication to bolstering bilateral relations. He also mentioned that the agreement symbolizes the increasing depth and trust in their partnership.
Modi’s comments followed Trump’s recent executive order to eliminate a 25 percent tax that had been imposed on India’s Russian oil purchases, facilitating the implementation of the new trade deal. Although Modi has received pushback at home regarding access to Indian agricultural markets for the US, he did not address the Russian oil issue in his statements.
“This framework will also build more reliable supply chains and boost global economic growth,” he noted.
India is set to finalize the trade agreement with the United States in March, according to statements from officials.
The deal is expected to create new opportunities for Indian farmers, entrepreneurs, and fishermen as part of the “Make in India” initiative. Commerce Minister Piyush Goyal mentioned that this agreement will open a vast $30 trillion market for Indian exporters and will protect sensitive Indian agricultural products, including crops like wheat and rice, as well as dairy items.
Additional terms of the trade agreement involve the removal of tariffs on specific aircraft and their parts, as outlined in a separate White House statement. Furthermore, India plans to buy $500 billion worth of US energy products, aircraft, precious metals, tech items, and coking coal over the next five years.
This agreement represents a significant reduction in US tariffs on Indian goods, which stood at 50 percent late last year. Washington and New Delhi are looking forward to formally signing the trade deal in March.
