Washington D.C. - In a move hailed as a potential breakthrough for global peace and trade relations, U.S. President Donald Trump announced a trade deal with India on Monday, which includes a reduction in tariffs on Indian goods from 25% to 18%. Trump stated that this decision follows a commitment from Indian Prime Minister Narendra Modi to cease the purchase of Russian oil.
According to President Trump, the agreement with Prime Minister Modi will not only bolster the economic ties between the two nations but also contribute significantly to ending the conflict in Ukraine. In a post on Truth Social, Trump conveyed that Modi had agreed to increase oil imports from the United States, and potentially Venezuela, alongside halting Russian oil acquisitions. The United States has been effectively overseeing Venezuelan oil exports since toppling the South American country's leader, Nicolas Maduro, in a military operation in January.
The trade deal encompasses a broader agreement where India will gradually eliminate tariffs and non-tariff barriers on U.S. goods. Trump also indicated that Modi committed to a substantial increase in the purchase of American products, potentially exceeding $500 billion, encompassing energy, technology, agriculture, and coal.
Prime Minister Modi confirmed the agreement regarding the reduced tariff on Indian goods. In a post on X, Modi expressed his delight at the tariff reduction but did not comment on any plans to discontinue Russian oil purchases. He stated, "Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18 percent". Modi highlighted President Trump's leadership as vital for global peace and stability and affirmed India's support for his peace efforts.
India's stance on Russian oil has been a contentious issue. Despite pressure from the U.S. and other Western nations, India has continued to import significant volumes of discounted Russian crude oil following Russia's invasion of Ukraine. In 2024, Russia accounted for approximately 36% of India's total crude imports, equivalent to about 1.8 million barrels per day.
A White House official stated that the Trump administration would also drop an additional 25% tariff imposed on Indian imports in response to its Russian oil purchases. Trump had previously stated in October that he had received a similar pledge from Modi regarding a halt to Russian oil imports, although no agreement materialized at that time.