Trump provided details of the agreement in a post on the Truth Social platform, reporting on a conversation with Indian Prime Minister Narendra Modi.
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Read also: The European Union and India have concluded a landmark trade agreement. High tariffs disappear
According to the American president India has committed to reducing its own tariffs and trade barriers to zero and to purchase raw materials, technologies and other products from the United States worth a total of $500 billion.
India is to move away from Russian oil
One of the most important elements of the agreement is India's declaration to stop buying Russian crude oil. Trump emphasized that Modi agreed to replace supplies from Russia with purchases from the US and potentially also from Venezuela. “We talked about a number of issues, including trade and ending the war between Russia and Ukraine. He agreed to stop buying Russian oil and buy much more from the United States and potentially also from Venezuela. This will help END THE WAR in Ukraine“Trump wrote.
This is particularly important because India has been one of the main recipients of cheap Russian oil in recent years. In August, Trump imposed additional 25 percent tariffs on this country precisely because of the purchases of raw materials from Russia. Since then, according to Bloomberg India's import of Russian oil has dropped significantly.
Read also: New EU-Mercosur free trade area. Disputes, concerns and behind the scenes of negotiations
A new chapter in trade relations
India was previously the only major economy in the world that did not have a negotiated trade agreement with the Trump administration. The announcement of the agreement comes right after the end of many years of negotiations between India and the European Union, which further emphasizes the importance of this moment.
Trump emphasized that he and Modi were “getting things done,” suggesting that their personal relationship played a key role in reaching an agreement. If the announcements are confirmed, the new agreement may significantly change the balance of power in global trade and the energy market.
