US and India reach trade deal, Trump says after Modi call

US President Donald Trump announced that he agreed to a trade deal with India's Prime Minister Narendra Modi, where the US will lower tariffs on goods from India to 18% from 25%.

In a post on Truth Social, Trump said India will reduce trade barriers to zero and will also stop buying Russian oil. An additional 25% tariff penalty imposed for Delhi's refusal to stop buying oil from Russia will be dropped.

The announcement comes less than a week after India and the European Union announced a landmark trade deal after nearly two decades of on-off talks.

Modi said on X that he is "delighted" that an agreement has been reached.

In the post, Trump said that a morning phone call with Modi included discussions of trade and the Russia-Ukraine war.

"He agreed to stop buying Russian oil, and to buy much more oil from the United States and, potentially, Venezuela," Trump wrote, adding that the deal will help "end" the fighting.

Trump added that, at Modi's request, he immediately "agreed to a trade deal" that would see tariffs lowered and India's tariffs and non-tariff barriers reduced to zero.

Additionally, Trump said Modi committed to buying more than $500bn (£366bn) worth of American goods including energy, technology, agriculture and coal products.

The trade relationship between the US and India has been strained since the US imposed 50% tariffs on goods from India - the highest for a country in Asia - in August, including a 25% penalty linked to India's purchase of Russian oil.

A White House official confirmed to the BBC that the Russian oil-linked tariffs will be dropped as part of the agreement and other tariffs lowered to put the rate at 18%.

"Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement," Modi said on X.

"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.

Indian exports to the US plummeted sharply as Trump's tariffs took effect.

Another trade deal signed by the EU and India last week will see a number of tariffs dropped across a range of goods and services, as well as a joint security partnership.

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