India has agreed to significantly increase purchases of American goods, including petroleum products, defence equipment, aircraft, and goods from other key sectors, under a newly announced trade agreement with the United States, a government official said. The arrangement follows negotiations to ease trade tensions and expand economic ties between the two nations. Under this deal, U.S President Donald Trump said India will raise its imports of U.S products “ at a much higher level”, potentially reaching about $500 billion over several years across sectors such as energy, technology, and agricultural goods. In exchange, the U.S. has agreed to significantly reduce tariffs on Indian exports, cutting duties from around 50 per cent to 18 per cent, thereby improving market access for Indian goods.
An Indian government official told Reuters that India’s commitment covers petroleum, defence systems, aircraft, electronics, pharmaceuticals, and telecommunications products. The official also noted that India has offered limited market access for some agricultural products as part of the border arrangement, although the detailed terms have not yet been finalised. The agreement represents the first tranche of a wider trade framework expected to be negotiated in the coming months. Officials emphasise that this deal is intended to reduce the current trade imbalance with the U.S. while deepening bilateral integration in strategic industries.
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Indian financial markets responded positively to the announcement, with the benchmark Nifty 50 index rising nearly 3 per cent and the rupee strengthening by over 1 per cent, reflecting increased investor confidence ahead of further negotiations. Both sides continue preparations for a comprehensive trade pact aimed at enhancing bilateral economic cooperation, expanding export opportunities for Indian firms, and increasing access for American manufacturers and service providers.
