Tariff Cuts and U.S. Purchases
President Donald Trump announced Monday that tariffs on Indian goods will drop from 25% to 18%, following discussions with Prime Minister Narendra Modi. Trump also said India will gradually eliminate import taxes on U.S. products and purchase $500 billion in American goods. Modi called the tariff reduction “delightful” on X, praising Trump’s leadership and expressing optimism for stronger bilateral ties, though he did not confirm any changes regarding Russian oil imports.
The Russia-Ukraine Factor
India has been a major buyer of Russian oil since Moscow’s invasion of Ukraine in 2022, taking advantage of discounted crude while Europe sharply cut imports. Trump has repeatedly argued that targeting Russia’s oil revenue is key to ending the war, though his promises of a quick resolution remain unfulfilled. Talks involving his special envoy Steve Witkoff and son-in-law Jared Kushner are scheduled in Abu Dhabi this week with Russian and Ukrainian officials to explore an endgame.
Trade History and Global Agreements
Earlier in 2025, Trump imposed tariffs totaling up to 50% on Indian goods, citing trade imbalances and India’s continued Russian oil purchases. The new deal brings tariffs down to 18%, closer to the 15% applied to EU and Japanese products. The announcement comes shortly after India finalized a free trade agreement with the European Union, reducing tariffs on nearly all goods and affecting as many as 2 billion people. India has also moved forward with trade deals with Oman and New Zealand, signaling a broader strategy to diversify trade while managing global tensions.
