Trump announces trade deal with India with 18% tariff

TOI correspondent from Washington: US President Donald Trump on Monday announced the long-awaited trade deal with New Delhi, lowering tariff rates on Indian exports from 25 percent to 18 percent, and presumptively scrapping the additional 25 percent punitive tariff because, according to him, India has agreed to stop buying Russian oil. In a post on social media soon after he wrapped up a call with Prime Minister Narendra Modi, Trump said he was announcing the deal “out of friendship and respect for PM Modi and, as per his request, effective immediately,” and asserted “our amazing relationship with India will be even stronger going forward.” PM Modi confirmed the deal a few minutes later, posting: "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.""When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation," he added, praising Trump’s leadership, which he said is "vital for global peace, stability, and prosperity" while declaring India's full support for his peace efforts. The US President made claims in his post that were not immediately confirmed by New Delhi. Among them: India will likewise move forward to reduce Tariffs and Non Tariff Barriers against the United States to ZERO; PM Modi committed to “BUY AMERICAN,” at a much higher level, in addition to over $500 BILLION DOLLARS of US Energy, Technology, Agricultural, Coal, and many other products; and while agreeing to stop buying Russian Oil, India will buy much more from the US and, potentially, Venezuela, which in Trump’s reckoning will help end the war in Ukraine. “Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most,” Trump concluded in a rah-rah announcement on social media. Trump’s disclosure of the trade deal was preceded by two India-related posts a few hours before, one of which featured him and Modi on a magazine cover with the caption “The Mover and the Shaker.” Another post featured New Delhi’s India Gate, a memorial to its soldiers slain in wars, which Trump called “India’s beautiful Triumphal Arch” and said “ Ours will be the greatest of them all!” – referring to a similar monument he wants to build in Washington DC. The much anticipated trade-deal, which has been months in the making, points to compromises from both sides: India whittling down Russian oil purchase and ticking up US energy purchase; and in return, Washington lowering tariff on imports from to 18 percent, slightly more than the baseline 15 percent that allies like UK got, but lower than the 19-20 per cent that countries such as Vietnam, Taiwan, Bangladesh, Pakistan, and Sri Lanka have.The US-India breakthrough came amid growing signs that New Delhi, while remaining open to a compromise and a fair deal in its estimate, was prepared to engage other markets, notably the EU with which it announced a free trade agreement last week. India has also been quietly making workarounds to circumvent the centrality of the US dollar in trade transactions, while ramping up rupee transactions. India's external affairs minister S. Jaishankar will be in Washington this week to build on the trade deal and prepare grounds for a meeting of quad leaders and possibly bilateral engagements, all of which were put on hold following differences on trade issues. The chasm, accompanied by intemperate language from Washington, eroded hard-won trust built over the nearly half century.