Trump announces U.S.-India trade deal slashing tariffs to 18%, tied to cuts in Russian oil purchases
President Donald Trump said he has agreed to a trade deal with India that will cut U.S. tariffs on Indian goods to 18% from 50%, in exchange for New Delhi lowering trade barriers, curbing purchases of Russian oil and increasing energy buys from the United States — and potentially Venezuela.
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In a social media post after a call with Indian Prime Minister Narendra Modi, Trump said the United States would reduce its “reciprocal” tariff to 18% from 25% “effective immediately.” A White House official said Washington is also rescinding a punitive 25% duty imposed over India’s purchases of Russian crude — a surcharge that had lifted the effective rate to 50%. U.S.-listed shares of major Indian companies rallied on the news.
Trump said Modi committed India to “BUY AMERICAN at a much higher level,” including more than $500 billion in U.S. energy purchases — spanning oil, coal and other supplies — along with increased imports of U.S. technology, agricultural and other products. He added that India would “move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO,” without providing timelines or sector specifics.
The White House did not immediately respond to a request for more details, including start dates for tariff reductions or product lists tied to India’s buying commitments. India’s trade and foreign ministries did not respond to requests sent after office hours in New Delhi.
Economist Madhavi Arora of Emkay Global said the change “brings India broadly in line with its Asian peers on tariff rates,” in the 15%–19% range, arguing it could remove a drag on India’s exports and the rupee. Indian assets had been under pressure since Washington levied the higher duties: the market was the worst performer among emerging economies in 2025, with record foreign outflows.
Until Trump returned to office and pushed U.S. tariff rates into double digits last year, India already had some of the world’s highest import duties, with a simple applied rate of 15.6% and an effective applied rate of 8.2%, according to World Trade Organization data.
Modi welcomed the announcement. “Delighted that Made in India products will now have a reduced tariff of 18%,” he wrote on X, thanking Trump “on behalf of the 1.4 billion people of India.” India’s Trade Minister Piyush Goyal said the agreement “unlocks unprecedented opportunities” for farmers, small businesses and skilled workers, and would help India access U.S. technology.
The pact lands less than a week after India concluded a long-awaited trade agreement with the European Union expected to eliminate or cut tariffs on 96.6% of traded goods by value, excluding EU soybeans, beef, sugar, rice and dairy.
On energy, Trump over the weekend also teased a potential arrangement for India to buy Venezuelan oil after the U.S. seized Venezuelan President Nicolás Maduro in a military raid in early January. The administration last August doubled duties on Indian imports to 50% to pressure New Delhi to wind down Russian oil purchases, and Trump warned earlier this month that the rate could rise again absent curbs.
India, the world’s third-largest oil importer, relies on imports for about 90% of its needs. Cheaper Russian barrels have helped lower import costs since Moscow’s 2022 invasion of Ukraine and Western sanctions on Russian energy. India has recently slowed those purchases: they were about 1.2 million barrels per day in January, projected to fall to about 1 million bpd in February and 800,000 bpd in March, according to Reuters.
Unlike recent agreements with Japan and South Korea that included large-scale investment pledges into U.S. industries, the U.S.-India announcement did not list new investment commitments. Key implementation questions — including precise start dates, schedules for reducing India’s non-tariff barriers and a breakdown of energy-buy targets — remain unanswered.
Still, the tariff reset signals a significant thaw after months of tense negotiations between the world’s two largest democracies and could reframe trade flows across goods from apparel and pharmaceuticals to energy, even as both sides work through the fine print.
By Abdiwahab Ahmed
Axadle Times international–Monitoring.
