The United States said on Wednesday that it will terminate additional duties on goods from India after the two countries reached an agreement on digital tax.

India and some other countries had imposed taxes on foreign digital services, which the US considered to be unfair to its big technology companies, AFP reported.

But now, India will adhere to a minimum tax deal which 140 countries, under the guidance of the Organisation for Economic Co-operation and Development, had agreed to in October, according to the news agency. This would involve imposing a minimum 15% corporate tax globally.

India’s finance ministry, while announcing the agreement, said that it will stay in close contact with the US to ensure that there is a mutual understanding of commitments and resolve any differences through dialogue.

The United States welcomed India’s statement. “India and the United States have committed to working together through constructive dialogue on this matter,” the American treasury said in a press note.

The US described the agreement as a “pragmatic solution”.

“It helps ensure that countries can focus their collective efforts on the successful implementation of the OECD [Organisation for Economic Co-operation and Development]/G20 Inclusive Framework’s historic agreement on a new multilateral tax regime and allows for the termination of trade measures adopted in response to the Indian equalisation levy,” it said.

The US treasury added that the deal was a demonstration of the countries’ commitment to “far-reaching multilateral reforms” that help support economies and public finances.