India-US Trade Deal: Modi's Major Move Amid Uncertainty Over Trump's Claims
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In a significant development, Indian Prime Minister Narendra Modi and US President Donald Trump announced a trade deal on Monday, but the details remain unclear. The agreement aims to reduce India's tariffs on American industrial goods to zero from 13.5% and allow India to maintain some agricultural import protections. US Trade Representative Jamieson Greer said the deal will benefit various industries, including tree nuts, wine, spirits, fruits, and vegetables, with tariffs set to drop to zero. However, India's tariffs on sensitive commodities like rice, soybeans, sugar, and dairy remain unchanged, sparking questions about the scope of the agreement. The deal is seen as a major step towards resetting the fractured ties between the two countries, with the US agreeing to reduce tariffs on Indian goods from 50% to 18%. This includes scrapping the punitive duty tied to purchases of Russian oil, a major point of contention. However, the agreement has raised several questions, including the timeline for the deal, the products covered, and whether India has indeed agreed to zero tariffs and non-tariff barriers. Critics, including opposition leader Rahul Gandhi, have accused Modi of 'selling the country under pressure.' Analysts believe the deal could unlock real commercial opportunities for India, particularly in the manufacturing sector, as the country's tariff rate is now lower than its Southeast Asian neighbors. The deal may also give a boost to the 'China-plus-one' process, which aims to lure exporters to India. The agreement has also sparked hopes for a thaw in the Quad grouping, which includes the US, Japan, India, and Australia, aimed at countering China's growing influence. The deal comes just days after India secured a landmark trade pact with the European Union, bringing the number of trade agreements signed by New Delhi since May 2025 to five. While the contours of the deal have given birth to new questions domestically for Modi, the US-India relationship has received a significant boost. As one analyst noted, 'the details remain cloudy, but the topline is that both sides are reducing tariffs meaningfully, which could unlock real commercial opportunities.'
