India has agreed to buy petroleum, defence goods, electronics, pharma and telecom products as well as aircraft from the U.S. under a trade deal, a government official told Reuters on Tuesday.

U.S. President Donald Trump announced a trade deal with India on Monday that slashes U.S. 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 U.S. 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 U.S. goods to reduce the trade deficit that the U.S. has with India.

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

India’s exports to the U.S. 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 U.S. 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 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 .NSEI, was up nearly 3% and the rupee INR=IN climbed over 1% to 90.40 per dollar in early trading.

-Shivangi Acharya/Reuters