Tariff Cuts and Promises of U.S. Purchases
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 reduce reliance on Russian oil. Trump also announced that India would begin eliminating import taxes on U.S. products and commit to buying $500 billion in American goods.
Trump framed the deal as a way to help end the war in Ukraine, claiming it would cut off funding for Russia’s invasion. Modi responded on X, calling the tariff reduction “delightful” and praising Trump’s leadership, though he did not confirm any change in India’s oil purchases from Russia.
Oil, Russia, and the Ukraine Conflict
India has been a major buyer of Russian oil since Moscow’s invasion of Ukraine in February 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 Russia’s energy revenue is the fastest path to ending the war, though his campaign promise to quickly resolve the conflict has yet to materialize. Talks are expected later this week in Abu Dhabi, with Trump’s envoy Steve Witkoff and son-in-law Jared Kushner meeting Russian and Ukrainian officials to explore an endgame.
Trade Tensions and Global Agreements
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 could fall to 18%, closer to the 15% rates applied to goods from the EU and Japan.
The announcement comes shortly after India reached a free trade deal with the European Union, opening nearly all goods for trade between India and the EU’s 27 members. India has also finalized agreements with Oman and concluded talks with New Zealand, reflecting a broader strategy to diversify trade and reduce reliance on the U.S. amid fluctuating tariffs.
While Trump presented the tariff reduction as a win for American businesses and global stability, questions remain about whether India will follow through on promised changes to Russian oil imports and the $500 billion in U.S. purchases.
