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The US cuts tariffs on Indian goods to 18% under a new trade deal. Here’s what Trump claims on Russian oil, US imports and what India has confirmed.
India-US Trade Deal News: India and the United States have announced a fresh trade understanding centred on a sharp reduction in American tariffs on Indian goods, following a call between Donald Trump and Narendra Modi. While New Delhi has formally confirmed the tariff relief, several wider claims made by the US President—ranging from Russian oil purchases to a $500 billion buying pledge—remain unverified by the Indian side.
Tariffs Cut Under New India–US Trade Understanding
US President Donald Trump said on Monday that he and Prime Minister Narendra Modi "have agreed to a Trade Deal" between the United States and India, under which Washington DC will apply a reduced reciprocal tariff of 18 per cent, down from 25 per cent.
India has since confirmed this tariff reduction, with Prime Minister Modi publicly welcoming the move following the call. The revised rate represents a significant easing of trade pressure after months of elevated duties on Indian exports.
What Changed: Removal of the Russian Oil Penalty
The earlier 50 per cent levy on Indian goods was composed of two parts: a 25 per cent reciprocal tariff and an additional 25 per cent import duty imposed over India’s purchase of Russian crude oil.
Under the new arrangement, the United States has withdrawn the punitive duty linked to Russian oil imports and lowered the remaining reciprocal tariff, bringing the overall rate down to 18 per cent. A White House official told Reuters that only the revised reciprocal tariff will now apply.
Competitive Edge for Indian Exports
With the revised tariff structure, India gains a relative advantage over several competing export economies in the region. Its tariff rate is now lower than those applied to Indonesia, Bangladesh and Vietnam.
Compared to China and Pakistan, Indian exports face significantly reduced US tariffs, potentially strengthening India’s position in key global supply chains.
$500 Billion Purchases and Oil Claims: What Trump Said
In a post on his Truth Social platform, President Trump outlined what he described as a broader package accompanying the tariff cuts. He claimed India would:
Reduce tariffs and non-tariff barriers on US goods to zero
Commit to purchasing more than $500 billion worth of US energy, technology, agricultural products, coal and other goods
Stop buying Russian oil and shift energy purchases to the United States and potentially Venezuela, linking the move to efforts to end the Russia–Ukraine war
What India Has—and Has Not—Confirmed
While India has officially acknowledged the reduction in US tariffs, it has not publicly confirmed several elements outlined by President Trump.
These include claims regarding a halt to Russian oil purchases, the removal of all tariffs and non-tariff barriers on US goods, or any commitment to buy $500 billion worth of American products.
Prime Minister Modi’s public statement focused solely on tariff relief and did not reference oil imports or large-scale purchase commitments.
India–US Trade Deal: What We Know So Far
- The US will cut reciprocal tariffs on Indian goods from 25 per cent to 18 per cent
- Prime Minister Modi has confirmed the 18 per cent tariff rate
- President Trump says the trade deal is effective immediately
- Trump claims India will buy over $500 billion in US goods
- Trump claims India will reduce tariffs and non-tariff barriers to zero
- Trump claims India will stop buying Russian oil and shift purchases to the US and possibly Venezuela
- India has confirmed tariff relief but not oil or purchase commitments
Context: From Trade Tensions to Reset Between India and US
The announcement follows a period of strain in India–US trade relations after Washington last year imposed 50 per cent tariffs on Indian goods, including the additional duty linked to Russian oil purchases. The latest agreement signals a partial reset, easing tariff pressures while leaving open questions over the broader strategic and economic commitments claimed by the US President.
English (US) ·