President Donald Trump announced that the US would roll back punitive tariffs on Indian goods in exchange for India agreeing to halt purchases of Russian oil, easing months of trade tensions between the two countries. Following a phone call with Prime Minister Narendra Modi, Trump said tariffs on Indian exports would be reduced to 18% from 25%, and an additional 25% duty linked to India’s Russian oil imports would be removed.
Trump claimed India would eliminate its tariff and non-tariff barriers against the US and commit to buying over $500 billion worth of American energy, technology, agricultural, and other products. Modi confirmed the reduced tariff rate but did not provide details on oil or agricultural imports, which remain sensitive for New Delhi.
India became a major buyer of Russian crude after the 2022 Ukraine war, attracted by discounted prices. Although US pressure and sanctions slowed shipments, Indian refiners continued purchases in the absence of a firm deal.
The tariff cut offers major relief for India, which sends nearly 20% of its exports to the US and has faced some of the highest levies among major trading partners. Economists say the move could boost India’s GDP growth by up to 0.3 percentage points and strengthen its position as a manufacturing alternative to China. Markets reacted positively, with Indian stocks and the rupee rallying on the announcement.
