After a year-long wait, India and the United States have finalised a trade deal. The announcement came following discussions between Prime Minister Narendra Modi and US President Donald Trump. This trade agreement is expected to benefit both countries and boost trade across multiple sectors.
The deal had been delayed due to issues related to Russian oil purchases and tariffs. However, a strategic move by Prime Minister Modi changed the situation.
‘Mother of All Deals’ Shifts the Balance, Trump Concedes
Recently, Ursula von der Leyen, President of the European Commission, and António Costa, President of the European Council, visited India. After meeting PM Modi, India and the European Union agreed to a historic free trade agreement (FTA) following nearly two decades of negotiations. Expected to come into effect by 2026, this agreement is set to bring significant benefits to both India and the EU, marking a new chapter of shared prosperity and strengthened strategic partnership. This FTA, termed the ‘Mother of All Deals’, is believed to have influenced the shift in the India-US trade negotiations.
Increased Pressure on the US
The India-EU free trade agreement has increased pressure on the United States. As a result, President Trump had to concede not only to the India-US trade deal but also agree to reduce tariffs. Trump is aware that the India-EU deal will open new markets for India in Europe, reducing India’s dependence on the US market, which could adversely affect American interests.
