The US reduces tariffs on Indian goods to 18%, while India halts Russian oil purchases, aiming to enhance trade and economic cooperation.
The US and India have reached a trade agreement that will see Washington reduce tariffs on Indian goods to 18 per cent from 50 per cent, reports London's S&P Global.
As part of the deal, India agreed to halt purchases of Russian oil. Prime Minister Narendra Modi stated that cooperation between the two democracies would unlock opportunities for their people.
The dispute had cut Indian imports to the US East Coast by more than 30 per cent. The US also pledged to lower a reciprocal tariff from 25 per cent to 18 per cent and scrap a separate 25 per cent levy linked to Russian oil purchases.
The tariff cuts are expected to make Indian textiles and apparel more competitive against rival Asian sourcing markets. Industry executives indicated that the agreement could spur a rebound in demand.
Imports from India to the US East Coast fell 32 per cent between August and December, dropping from 93,160 TEU to 63,590 TEU. Spot rates slid from US$2,640 per FEU in August to $1,212.50 by January 30, marking a 54 per cent decline.
Carriers have struggled to sustain rate increases amid weak demand, resorting to blank sailings to balance supply and demand. The new deal is expected to stabilize volumes and support recovery in the trade lane.
