US President Donald Trump stated Monday that the United States struck a trade deal with India, lowering existing tariffs after Prime Minister Narendra Modi reportedly pledged to halt purchases of Russian oil related to the Ukraine conflict. According to Trump's statement, levies on many Indian products will decrease to 18% from the previous 25% duty imposed last year.
This agreement directly addresses months of bilateral tension where Washington sought to curtail New Delhi's energy imports from Moscow, viewing them as funding the ongoing war. A White House official confirmed to AFP that an additional 25% tariff, specifically targeting India's Russian oil purchases, would also be dropped under the new terms.
Trump claimed in a post on Truth Social that Modi also agreed to increase energy and product purchases from the US and potentially Venezuela, asserting this action would aid in ending the war. India reportedly agreed to acquire over $500 billion in US energy, technology, and agricultural products, though details remain sparse, according to Trump.
Prime Minister Modi, while confirming the tariff reduction in a post on X, thanked Trump for the call and expressed delight over the 18% tariff rate. However, Modi made no explicit public reference to any commitment regarding the cessation of Russian oil imports, according to reports.
Analysts note the complexity of India's energy calculus, as Russia supplied nearly 36% of India's crude imports in 2024, providing Moscow a vital revenue stream. Farwa Aamer of the Asia Society Policy Institute suggested that while India may alter its procurement structure, maintaining stable relations with Moscow remains a consideration.
Tanvi Madan, a senior fellow at the Brookings Institution, suggested that a recent EU-India trade accord might have influenced Washington's willingness to finalize the bilateral agreement. Madan noted that the precise sectoral relief and implementation details of the new trade framework will require further scrutiny.
