India and the United States have reached a trade agreement under which Washington will reduce tariffs on Indian goods to 18 percent from 50 percent. 

US President Donald Trump announced late Monday that the tariff cut would come in exchange for India halting purchases of Russian oil and committing to buy more than $500 billion worth of American goods, including energy, defence, agricultural and technology products.

Indian Prime Minister Narendra Modi confirmed the revised tariff decision in a separate post on social media platform X but did not outline any concessions made by New Delhi.

The rupee strengthened more than 1 percent on Tuesday to 90.37 against the US dollar, while India’s benchmark Nifty 50 index rose 5 percent. The new tariff rate is lower than those applied by the US to imports from Vietnam and Bangladesh.

US officials have yet to provide a timeline for when the reduced tariff will take effect or for the implementation of India’s purchase commitments. US currently supplies $46 billion of India’s $690 billion annual imports.