Trump Signs India Trade Agreement That Reduces Tariffs to 18% as Stocks Go Up

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TLDR

  • Under the new Trump – Modi trade deal, the US reduces tariffs on Indian goods from 25% to 18%.
  • Modi pledges to halt Russian oil imports and boost US energy purchases.
  • As trade tensions ease, the S&P 500 climbs 0.7% and the Nasdaq rises 0.8%.
  • With a decline in investor demand for safe – havens, gold drops 4% and silver falls 7%.

On Monday, President Donald Trump declared a significant trade breakthrough with India, slashing tariffs on Indian goods from 25% to 18%. This deal indicates closer economic relations between the two countries as Prime Minister Narendra Modi promised to increase imports from the US and stop buying Russian oil. Investors reacted favorably, and US markets went up as trade tensions subsided and new prospects emerged for American exports in the energy, agriculture, and technology sectors.

Tariffs Reduced in Fresh Trade Agreement

On Monday, President Donald Trump confirmed a new trade deal with India that cuts tariffs on Indian goods entering the US. The tariff rate has been decreased from 25% to 18%, and the changes take effect right away.

Prime Minister Narendra Modi also recognized the agreement. He said that India would increase its imports from the United States, concentrating on energy, agricultural products, and advanced technology. Trump stated, “This trade deal creates a path for over $500 billion in future exports from the US.”

The new terms are intended to promote balanced trade and strengthen cooperation between the two countries. The White House said that the agreement supports fair market access and long – term economic ties.

Shift in Energy Strategy and Russian Oil Commitments

Prime Minister Modi confirmed that India will cease purchasing oil from Russia. He mentioned that India will now focus on energy trade with the United States and other non – sanctioned sources like Venezuela.

This action comes after growing pressure from [missing entity in original] to reduce reliance on Russian energy during global tensions. Modi’s statement represents a clear policy shift and signals greater alignment with the United States.

The US Energy Department stated that it would collaborate with Indian companies to ensure stable energy supplies. It also announced plans to send trade delegations to India in the coming weeks to explore new opportunities.

Markets React with Gains Across Major Indices

US equity markets responded well to the trade news. The S&P 500 rose 0.7%, closing near its all – time high, and the Nasdaq climbed 0.8%. Traders noticed the change in investor sentiment as tensions eased and trade became more predictable.

Major sectors such as technology, industrials, and energy experienced gains. Analysts attributed the rally to increased confidence in [missing entity in original] trade stability and a decrease in geopolitical risks.

Safe – haven assets, which are usually preferred during market turmoil, dropped significantly. Gold prices fell by 4% to $4,660, and silver dropped more than 7% to $79. The decline reflects less investor demand for risk protection.

Strategic and Economic Outcomes of the Deal

The trade agreement is expected to stimulate US exports in several sectors. Trump said that the deal unlocks more than $500 billion in future trade opportunities. The US Trade Representative’s office noted that market access would be expanded in a way that benefits American producers.

India’s commitment to changing its oil sources is also expected to alter global energy flows. This transition will create new supply chains and open up new markets for US energy exports.

The Department of Commerce said it would closely monitor the implementation and ensure fair trade practices. Both countries have agreed to meet every six months to review the progress of the deal and address any issues.