The United States has agreed to sharply reduce tariffs on Indian goods after a phone call between U.S. President Donald Trump and Indian Prime Minister Narendra Modi, marking a significant thaw in bilateral trade tensions.
Tariff Adjustment:
• The U.S. will cut its overall tariffs on Indian imports to 18 %, down from rates effectively as high as 50 % after punitive levies imposed last year.
• A separate 25 % tariff linked to India’s previous purchases of Russian oil has been rescinded.
Energy Shift & Russia:
• Trump said Modi agreed to halt purchases of Russian crude oil as part of the accord — a central U.S. demand amid geopolitical pressure over the Ukraine war.
• The U.S. leader also stated India will boost purchases of U.S. oil and potentially oil from Venezuela instead of Russia.
Trade & Economic Impact:
• The move follows months of escalating tariff pressure that had strained economic ties between the world’s two largest democracies.
• Indian markets and exporters responded positively to the tariff cut news.
• The deal also includes commitments to reduce trade barriers and increase Indian imports of U.S. energy and goods.
Diplomatic Notes:
• India’s official statement welcomed tariff relief but did not explicitly confirm stopping Russian oil imports, and refiners may need time to wind down existing contracts.
• The timing comes shortly after India concluded a free trade deal with the European Union.
In Brief:
The U.S. and India have reached an agreement reducing tariffs on Indian exports to 18 % after New Delhi signaled a shift in oil sourcing — moving away from Russia toward U.S. and Venezuelan suppliers — in a strategic realignment with significant trade and geopolitical implications.
