Tariff Reductions and Trade Promises
President Donald Trump said Monday that tariffs on Indian goods would drop from 25% to 18% after Indian Prime Minister Narendra Modi reportedly agreed to curb purchases of Russian oil. Trump added that India would reduce import taxes on U.S. goods to zero and commit to buying $500 billion in American products.
Trump framed the deal as a step toward ending the war in Ukraine, claiming that cutting Russia’s oil revenue could help stop the conflict. Modi called the tariff reduction “delightful” and praised Trump’s leadership on X, highlighting a “wonderful” phone call, though he did not confirm any changes to India’s oil imports from Russia.
Russia, Oil, and the Ukraine Dispute
India has been one of Russia’s largest oil buyers since the 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 total crude imports, about 1.8 million barrels per day.
Trump has long argued that targeting Russian energy revenue is the fastest way to end the war, though his campaign promise to resolve the conflict quickly has not materialized. Talks are expected later this week in Abu Dhabi, with Trump’s special envoy Steve Witkoff and son-in-law Jared Kushner meeting Russian and Ukrainian officials to explore an endgame.
Tariff History and Global Trade Moves
Earlier in 2025, Trump imposed tariffs of up to 50% on Indian goods, citing trade imbalances and India’s continued Russian oil purchases. With the new agreement, tariffs would fall to 18%, closer to the 15% applied to goods from the EU and Japan.
The announcement comes shortly after India finalized a free trade agreement with the European Union, opening nearly all goods to duty-free trade and affecting up to two billion people. India has also signed trade deals with Oman and concluded talks with New Zealand, signaling a broader push to diversify global trade relationships amid fluctuating U.S. tariffs.
While Trump presented the tariff reduction as a win for American businesses and global stability, it remains unclear how quickly India will reduce its Russian oil imports and whether promised trade commitments will fully materialize.
