Just days after the India-EU trade deal, the leaders of the United States and India, in a phone call, reached a framework for an interim agreement on reciprocal trade and reaffirmed their commitment to broader US-India Bilateral Trade Agreement (BTA) negotiations. President Trump announced the deal, saying New Delhi agreed to stop buying Russian oil and may purchase it instead from Venezuela – The United States is effectively overseeing Venezuelan oil exports since toppling the South American country's leader Nicolas Maduro in a military operation in January. Trump added that “out of friendship and respect” for Modi, the US would lower its reciprocal tariff rate from 25% to 18%, while India would reduce tariffs on US goods to zero.
The announcement comes after months of escalating trade sanctions, triggered by Washington's dissatisfaction with India's energy sourcing and broader trade imbalance. The dispute dates back to early 2025, when the Trump administration, pursuing a tough trade agenda, launched a series of tariffs under what it called “reciprocal tariff” policies aimed at reducing the US trade deficit with major partners. Here is a timeline of events:
3 April 2025: The US announced 27% 'reciprocal' tariffs on India.
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