In a pivotal trade concession, the United States will eliminate a 25% tariff imposed on India over its Russian crude oil purchases, after India agreed to stop buying from Russia. White House officials revealed this on Monday, following high-level talks between President Trump and PM Modi.
The tariff rollback is part of a broader agreement reached during their phone discussion, which covered trade, energy, and the Russia-Ukraine conflict. Trump posted on Truth Social that tariffs on Indian imports would drop from 25% to 18% right away, hailing it as a breakthrough in US-India relations.
He noted PM Modi’s assurance to cease Russian oil imports and boost sourcing from American and possibly Venezuelan supplies. This comes as the US intensifies pressure on nations to isolate Russia’s energy sector amid the war.
Modi celebrated the news on X, pointing to the lower tariffs benefiting ‘Made in India’ goods and underscoring the power of democratic partnerships. A top US official clarified that the extra 25% levy was explicitly linked to India’s Russian oil dealings, now resolved by New Delhi’s import halt.
India’s strategy has balanced energy security with discounted Russian barrels, while pushing for peaceful resolutions through talks. The nations are advancing trade negotiations, with energy ties solidifying—US exports of oil and gas to India have surged lately.
Policymakers, refineries, and markets await ripple effects from this policy pivot. Meanwhile, Foreign Minister Jaishankar’s upcoming DC trip for critical minerals talks signals deepening collaboration on supply chains and green energy.
Over the past decade, US-India bonds have deepened in defense, tech, and economy, positioning trade and energy as future pillars of this vital alliance.
