Tariff Reductions and Trade Commitments
President Donald Trump announced Monday that tariffs on Indian goods will drop from 25% to 18%, following talks with Prime Minister Narendra Modi. Trump also said India would gradually eliminate import taxes on U.S. products and commit to purchasing $500 billion in American goods. Modi responded positively on X, calling the move “delightful” and praising Trump’s leadership, though he did not confirm any changes regarding Russian oil purchases.
India, Russia, and the Ukraine War
India has been one of Russia’s largest oil buyers since Moscow’s invasion of Ukraine in 2022, taking advantage of discounted crude while Europe sharply reduced imports. In 2024, Russian oil accounted for nearly 36% of India’s crude imports, roughly 1.8 million barrels per day. Trump has repeatedly argued that cutting Russia’s oil revenue is key to ending the war, but his promises of a quick resolution remain unfulfilled. Talks involving his special envoy Steve Witkoff and Jared Kushner are planned in Abu Dhabi this week with Russian and Ukrainian officials.
Trade History and Global Agreements
Earlier in 2025, Trump imposed tariffs of up to 50% on Indian goods, citing both trade imbalances and India’s Russian oil purchases. With the new agreement, tariffs would drop to 18%, aligning closer to rates applied to EU and Japanese products. The announcement comes shortly after India finalized a free trade deal with the European Union, which will reduce tariffs on nearly all goods and impact as many as 2 billion people. India has also advanced trade agreements with Oman and New Zealand, signaling a broader strategy to diversify trade while navigating global tensions.
