Tariff Cuts and U.S. Trade Promises
President Donald Trump announced Monday that U.S. tariffs on Indian goods will drop from 25% to 18%, following talks with Prime Minister Narendra Modi. Trump said India would also gradually remove import taxes on American products and commit to buying $500 billion in U.S. goods. Modi called the announcement “delightful,” praising Trump’s leadership, though he did not comment on claims about ending Russian oil purchases.
The Russia-Ukraine Factor
India has been a major buyer of discounted Russian oil since Moscow invaded Ukraine in February 2022, supplying around 36% of India’s crude imports in 2024. Washington has long pressed India to reduce these purchases, arguing they fund Russia’s war. Trump has tied tariffs and trade incentives to his strategy for ending the conflict, while his envoy Steve Witkoff and son-in-law Jared Kushner are set to hold talks in Abu Dhabi with Russian and Ukrainian officials later this week.
Global Trade Context
Trump first imposed tariffs on India in mid-2025, citing trade imbalances and its Russian oil imports, raising some rates to as high as 50%. The new deal drops most of these additional tariffs, bringing rates closer to levels applied to EU and Japanese goods. The announcement follows India’s recent free trade agreement with the European Union, which opens markets for nearly all goods between the two regions, and comes as India moves to finalize deals with Oman and New Zealand, signaling a broader effort to diversify trade and strengthen its global economic partnerships.
