The White House on Monday said the new India–United States trade deal is a “historic” step that will open India’s massive market to American products. In an official statement, the White House said the agreement will give US companies access to India’s market of more than 1.4 billion people.
“Last Friday, in a Joint Statement, President Donald J. Trump announced a trade deal between the United States and India that will open up India’s market of over 1.4 billion people to American products,” the statement said.
Deal followed Trump–Modi phone call
The Joint Statement came after a phone call last week between US President Donald Trump and Prime Minister Narendra Modi. During the call, both leaders agreed on a framework for an Interim Agreement on reciprocal trade. They also confirmed their commitment to continue talks on a broader US–India Bilateral Trade Agreement (BTA). According to the White House, the two leaders discussed trade, tariffs, and wider economic cooperation during the conversation.
One of the major announcements from the call was the removal of an additional 25% tariff that the US had placed on Indian imports. The White House said Trump agreed to lift the tariff after India committed to stopping the purchase of oil from the Russian Federation.
“Also on the call, Trump agreed to remove the additional 25% tariff on imports from India in recognition of India’s commitment to stop purchasing Russian Federation oil,” the statement said. It added that Trump signed an Executive Order last Friday to officially remove the extra tariff.
The US also announced a further tariff reduction for India. The White House said the Reciprocal Tariff on India will be lowered from 25% to 18%. This decision, it said, was based on India’s willingness to work closely with the US on trade imbalances and shared national security concerns.
India will keep buying energy based on price, safety and supply, says Foreign Secretary
However, despite US claims that India has stopped purchasing Russian oil, Foreign Secretary Vikram Misri said on Monday that India will continue to buy oil and energy from different parts of the world, focusing on what is affordable, reliable and secure.
“Our approach is to maintain multiple sources of supply and diversify them as appropriate to ensure stability. Therefore, the more diversified we are, the more secure we are,” he said.
Misri was responding to a question on India’s position on Russian oil imports after US President Donald Trump said last week that India had “committed to stop directly or indirectly” importing Russian crude as part of a trade deal. Without directly addressing Trump’s claim, the foreign secretary stressed that India’s decisions are guided by practical needs and economic realities.
Misri said both the government and businesses take decisions on oil imports by keeping national interest at the centre. “We are a developing economy. We have to be conscious about our resource availability,” he said. He pointed out that India depends heavily on imported energy, which makes price stability a major concern. “Naturally, when you are dependent to the extent of 80–85% on an imported resource, you have to have concerns about the possibility of inflation driven by energy costs,” Misri added. He said protecting Indian consumers remains the government’s top priority.
Misri said India buys crude oil from many countries and does not depend on any single supplier. “We import crude oil from dozens of countries. We are neither dependent on any single source for this, nor do we intend to be,” he said. He added that the mix of suppliers keeps changing based on market conditions. “It is natural for the mix of sources to vary from time to time depending on objective market conditions,” Misri said.
Misri also clarified that actual procurement decisions are taken by oil companies, both public and private. “They make decisions based on market conditions. They assess availability, risks and costs,” he said.
What India agreed to under the US trade deal
Under the agreement, India will either eliminate or reduce tariffs on all US industrial goods and a wide range of American food and agricultural products. These include dried distillers’ grains (DDGs), red sorghum, tree nuts, fresh and processed fruits, certain pulses, soybean oil, wine, spirits, and several other products.
The White House said India also committed to buying more American goods and services. India has agreed to purchase over USD 500 billion worth of US energy, information and communication technology, agricultural products, coal, and other items. The statement said India will take steps to remove non-tariff barriers that affect trade between the two countries, especially in key priority sectors.