India likely to buy petroleum, defence goods, aircraft from US under deal

Trump announced a trade deal with India that slashes US tariffs on Indian goods to 18% from 50% in exchange for India halting Russian oil purchases and lowering trade ​barriers

India has agreed to buy petroleum, defence goods, electronics, pharma and telecom products as ‍well as aircraft from the ​US under a trade deal, a government official told Reuters on Tuesday.

US President Donald Trump announced a trade deal with India on Monday that slashes US tariffs on Indian goods to 18 per cent from 50 per cent in exchange for India halting Russian oil purchases and lowering trade ​barriers.

Trump said India agreed "BUY AMERICAN at a much higher level." He said India could buy $500 billion worth of US energy, coal, along with technology, agricultural and other products.

The Indian government official, who did not want to be named, said India has agreed to buy US goods to reduce the trade deficit that the US has with India.

India's trade ministry did not immediately reply to an e-mail seeking comment.

India's exports to the US rose 15.88 per cent year-on-year to $85.5 billion in January-November, while imports stood at $46.08 billion, commerce ministry data showed.

"The commitment to buy US products covers sectors like pharmaceuticals, telecom, defence, petroleum and ‌aircraft. It will be done over the ​years," the official told Reuters.

"We have offered market access in some agricultural products too," the official said, without giving details.

The official said the deal is the first tranche and a more comprehensive deal ‍will be negotiated over coming months.

Under the deal, India has cut tariffs on automobiles as part of Washington's immediate demand to ‍address ‌the trade imbalance.

The ​announcement lifted investor sentiment on Tuesday.

India's benchmark ‍stock index, the Nifty 50, was up nearly 3 per cent and the ‍rupee ‍climbed over 1 per cent ‌to 90.40 per dollar in early trading.