By Shivangi Acharya
NEW DELHI, Feb 3 (Reuters) – India has agreed to buy crude oil, defense products and aircraft from the United States, while partially opening its heavily protected agricultural sector under a trade deal, according to a government official, after months of tensions between the two sides.
President Donald Trump announced on Monday a trade agreement with India that reduces US tariffs on Indian products from 50% to 18% in exchange for the Asian country stopping purchases of Russian oil and reducing trade barriers.
Trump stated that India has agreed to buy more American products, with an increase in purchases of up to $500 billion, including energy, coal, technology, agricultural products and others.
The Indian government official, who did not want to be identified, said India has agreed to buy American products, including telecommunications and pharmaceuticals, and has offered market access for some agricultural products, as part of New Delhi’s commitments under the deal.
India recently offered selective market access for agricultural products to the European Union under a trade agreement.
The Asian country has also reduced tariffs on imported cars to respond to Washington’s immediate demands to conclude the first phase of the agreement, the official added.
India’s commerce ministry did not immediately respond to an email seeking comment.
India’s exports to the United States increased 15.88% year-on-year to reach $85.5 billion between January and November, while imports stood at $46.08 billion, according to Indian government data.
“The commitment to buy American products covers sectors such as pharmaceuticals, telecommunications, defense, oil and aeronautics. It will be carried out over the years,” the source told Reuters.
The official stated that a broader pact with the United States will be negotiated in the coming months.
THE AGREEMENT IMPROVES TRUST
The announcement of the trade agreement between India and the United States has greatly reduced global uncertainty, Indian Economic Affairs Secretary Anuradha Thakur said at an event in New Delhi on Tuesday.
Investor confidence has also improved. India’s benchmark stock index, the Nifty 50, rose almost 3% and the rupee appreciated more than 1% to 90.40 per dollar in early trading.
