United News of Bangladesh

The United States and India have reached a trade agreement under which Washington will lower tariffs on Indian goods to 18% from 25%, while New Delhi has agreed to sharply reduce trade barriers and boost purchases of American products, US President Donald Trump said. Announcing the deal on his Truth Social platform after a phone call with Indian Prime Minister Narendra Modi, Trump said India would bring both tariff and non-tariff barriers down to zero and stop buying Russian oil. As part of the agreement, an additional 25% tariff penalty imposed earlier over India’s continued purchase of Russian oil will also be withdrawn. Trump said Modi requested an immediate trade agreement during the call, which also covered the Russia-Ukraine war, and committed to buying more than $500 billion worth of US goods. These include energy, technology, agricultural products and coal. “He agreed to stop buying Russian oil and to buy much more oil from the United States and, potentially, Venezuela,” Trump wrote, adding that the agreement would significantly expand US exports to India. A White House official later confirmed that tariffs linked to Russian oil purchases would be dropped and that the overall tariff rate on Indian goods would be reduced to 18%. Modi welcomed the announcement, saying on X that he was “delighted” by the agreement. He thanked Trump on behalf of India’s 1.4 billion people and said cooperation between the two countries would unlock major opportunities for mutual benefit. “When two large economies and the world’s largest democracies work together, it benefits our people,” Modi said. The deal comes at a sensitive moment for India’s trade policy. Indian exports to the United States fell sharply after Washington imposed tariffs of up to 50% on Indian goods last August, the highest applied to any Asian country. In response, New Delhi had been seeking alternative trade partnerships. Less than a week ago, India and the European Union announced a long-awaited free trade agreement aimed at cutting duties on most goods traded between India and the 27-nation bloc. European Commission President Ursula von der Leyen described it as the “mother of all deals,” with EU officials saying it could double European exports to India by 2032. Analysts said the US-India deal signals Washington’s intent to reassert its position in global trade. Terry Haines, founder of Pangaea Policy, described the agreement as a response to perceptions that the EU was gaining ground on the United States in trade relations. US markets edged higher following Trump’s announcement. However, the agreement has drawn criticism from some US business groups. We Pay the Tariffs, a coalition representing about 800 small American companies, said the deal still leaves tariffs far higher than before Trump’s trade measures. Its director, Dan Anthony, said US importers previously paid an average tariff of 2.5% on Indian goods, calling the new rate a long-term tax increase rather than relief.   With inputs from BBC