The US and India have reached one provisional trade agreement this would reduce tariffs in both countries, a joint statement revealed on Friday.

“The Interim Agreement between the United States and India will represent a historic milestone in our countries’ partnership, demonstrating a common commitment to reciprocal and balanced trade based on mutual interests and concrete results,” the statement said.

US Trade Ambassador Jamieson Greer praised the president Donald Trump’s “deal-making” for the deal, saying it is “unlocking one of the world’s largest economies for American workers and producers, reducing tariffs on all American manufactured goods and a wide range of agricultural products.”

He added that Friday’s announcement “demonstrates the deepening ties between the United States and India as we create new opportunities for farmers and entrepreneurs in both countries. I thank Indian Commerce and Industry Minister Goyal for his leadership and commitment to achieving fair and balanced trade with the United States.”

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President Donald Trump and Indian Prime Minister Narendra Modi shake hands before their meeting at Hyderabad House on February 25, 2020 in New Delhi, India. (AP Photo/Alex Brandon, File/AP Newsroom)

This comes after Trump said on Monday that the US and India had agreed to the trade deal following his phone call with Indian Prime Minister Narendra Modi.

Under the terms of the agreement, India will “eliminate or reduce tariffs on all US industrial goods” and other food and agricultural products such as animal feed, nuts and fruits.

In return, the US will apply a reciprocal tariff rate of 18% on goods from India, including “textiles and garments, leather and footwear, plastic and rubber, organic chemicals, home decoration, handicrafts and certain machinery”.

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A billboard in Ahmedabad, India in 2020 of President Trump, the First Lady and Indian Prime Minister Narendra Modi. (Reuters/Amit Dave/Reuters)

Upon the successful conclusion of the interim agreement, the US will also eliminate reciprocal tariffs on other products, “including generic pharmaceuticals, gems and diamonds, and aircraft parts,” according to the joint statement.

The old 50% tariff on Indian goods was reduced in exchange for India stop purchases of Russian oil and reduce trade barriers.

The port of Daendayal in the candle in the western state of Gujarat, India. (Reuters/Amit Dave/Reuters)

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The agreement adds that “India intends to purchase $500 billion US energy productsaircraft and aircraft parts, precious metals, technology products and coking coal over the next 5 years.”

A formal trade agreement between the two countries is expected in March.