US President Donald Trump announced a trade deal with India on Monday that slashes US tariffs on Indian goods to 18% from 50% in exchange for India halting Russian oil purchases and lowering trade barriers.

Trump said India agreed “BUY AMERICAN at a much higher level.”

He said India could buy $500 billion worth of US energy, coal, along with technology, agricultural and other products.

The Indian government official, who did not want to be named, said India has agreed to buy US goods to reduce the trade deficit that the US has with India.

India’s trade ministry did not immediately reply to an e-mail seeking comment.

India’s exports to the US rose 15.88% year-on-year to $85.5 billion in January-November, while imports stood at $46.08 billion, commerce ministry data showed.

“The commitment to buy US products covers sectors like pharmaceuticals, telecom, defence, petroleum and aircraft. It will be done over the years,” the official told Reuters.

“We have offered market access in some agricultural products too,” the official said, without giving details.

The official said the deal is the first tranche and a more comprehensive deal will be negotiated over the coming months.

Under the deal, India has cut tariffs on automobiles as part of Washington’s immediate demand to address the trade imbalance.

The announcement lifted investor sentiment on Tuesday.

India’s benchmark stock index, the Nifty 50, was up nearly 3% and the rupee climbed over 1% to 90.40 per dollar in early trading.