India, US Ink Historic Trade Deal: Lower Tariffs, Increased Oil and Arms Imports

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In a significant development, India and the United States have agreed to a trade deal that will see India purchasing more American goods, including oil, arms, and aircraft, while partially opening up its agriculture sector. The deal, announced by US President Donald Trump on Monday, slashes US tariffs on Indian goods to 18% from 50% in exchange for India halting Russian oil purchases and lowering trade barriers. As part of the agreement, India has committed to buying more American products, including energy, coal, technology, and agricultural products, with purchases expected to rise to as much as $500 billion. The Indian government has also agreed to offer market access for some agricultural products, including those offered to the European Union under a recent trade deal. The deal is expected to benefit Indian exporters, who will now face lower tariffs on their products in the US market. India's exports to the US rose 15.88% year-on-year to $85.5 billion in January-November, while imports stood at $46.08 billion. The reduction in US tariffs is expected to improve price competitiveness and help Indian exporters integrate more deeply into US supply chains. The trade deal has also lifted investor sentiment, with India's benchmark stock index, the Nifty 50, rising nearly 3% and the rupee climbing over 1% to 90.40 per dollar in early trading. Analysts believe that the reduction in US tariffs will reinvigorate India's goods exports to the US, making it a significant win for the Indian economy. The deal is seen as a major breakthrough in US-India relations, which had been strained in recent months. The two sides are expected to negotiate a more comprehensive pact over the coming months, with a focus on increasing trade and investment between the two countries.