Earlier this week, President Donald Trump announced that the United States and India had reached a landmark trade agreement. While the precise language of the deal has not yet been released, the broad contours are unmistakably positive for both countries.

Under the agreement, tariffs on Indian exports to the United States will be reduced dramatically, falling to roughly 18% from levels that reached as high as 50% on certain goods. In exchange, India will eliminate tariffs on American exports entirely. India has also agreed to halt purchases of Russian oil and to commit, over a five-year period, to buying an additional $500 billion in U.S. goods and services. Those purchases will span communications equipment, pharmaceuticals, energy products, defense items, and agricultural goods.