New Delhi/Washington: Former U.S. President Donald Trump on Monday announced a fresh trade agreement between the United States and India, signalling a significant shift in tariff policy and bilateral economic engagement.

Under the deal, Washington has withdrawn a 25 per cent tariff earlier linked to India’s purchases of Russian oil and reduced a reciprocal levy to 18 per cent with immediate effect. In exchange, India has agreed to sharply lower trade barriers on American goods—bringing several close to zero—and expand imports of U.S. energy, technology and agricultural products.

Prime Minister Narendra Modi thanked Trump for the agreement, describing it as beneficial for India’s 1.4 billion people. Government officials in New Delhi said the pact could aid job creation and strengthen growth by improving market access and trade flows.

Investor sentiment responded swiftly, with the benchmark BSE Sensex jumping more than 2,200 points after the announcement. Critics, however, cautioned that the agreement may favour U.S. exporters disproportionately, raising questions about its long-term balance.

Analysis: The sharp market rally reflects optimism over reduced trade friction, but the durability of that confidence will depend on how domestic industries adjust to lower protection. For policymakers, the challenge will be ensuring that expanded trade translates into sustainable gains rather than short-term volatility. This assessment reflects analytical opinion; all factual details above are drawn from the original content.