India-US trade deal expected to boost ‘Made in India’ initiative
Indian products would now face a reduced reciprocal tariff of 18%. In a reciprocal move, India has committed to reducing trade barriers for American goods and significantly increasing imports across energy, technology, and agriculture.
Finance Minister Nirmala Sitharaman has welcomed the reduction in United States' tariffs on Indian goods, describing the development as a major boost for the ‘Made in India’ initiative. Taking to social media platform X, the finance minister said that Indian products would now face a reduced reciprocal tariff of 18%.
"Good news for #MadeInIndia products. They will now face reduced tariff of 18%. Thanking the leadership of PM @narendramodi and @POTUS for this development. People of our two large democracies stand to benefit," she said in a post on X.
The breakthrough follows a high-level telephonic conversation between Prime Minister Narendra Modi and US President Donald Trump.
In a reciprocal move, India has committed to reducing trade barriers for American goods and significantly increasing imports across sectors, including energy, technology, and agriculture.
Following the trade agreement announcement, Prime Minister Modi said he was delighted that Made-in-India products will now have a reduced tariff of 18%.
"Wonderful to speak with my dear friend President Trump today. Delighted that Made-in-India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement," Modi said.
He said when two large economies and the world's largest democracies work together, it benefits the people and "unlocks immense opportunities for mutually beneficial cooperation".
"President Trump's leadership is vital for global peace, stability, and prosperity. India fully supports his efforts for peace," Modi said on X.
President Trump said India will move forward to reduce "tariffs and non-tariff barriers" against the US to zero, adding New Delhi would buy American goods, including energy, worth more than $500 billion.
"Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a trade deal between the United States and India, whereby the United States will charge a reduced reciprocal tariff, lowering it from 25% to 18%," the US president said on social media.
India will "likewise move forward to reduce their tariffs and non-tariff barriers against the United States, to zero," he said.
Trump said Modi also committed to buy American goods at a much higher level, in addition to over $500 billion dollars of US energy, technology, agricultural, coal, and many other products.
Following news of the India-US trade deal, stock markets in the country saw a historic jolt with the Sensex jumping over 3,500 points and Nifty 50 rising nearly 5%, according to reports. The Indian rupee also strengthened by more than 1%, opening at about 90.40 against the US dollar.
This deal marks a thaw in India-US relations after a year of trade friction between the two nations. The agreement also calls for a critical commitment from India to halt oil purchases from Russia.
(With inputs from PTI)
Edited by Swetha Kannan