The U.S. President Donald Trump announced trade deal with Indian Prime Minister Narendra Modi, saying that the United States would reduce tariffs on Indian goods and that India had committed to stop buying oil from Russia.
In an extended post on his Truth Social platform, Trump said the agreement with Modi would see U.S. tariffs on Indian exports lowered to 18 per cent, down from a combination of higher duties previously imposed. “Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%,” Trump wrote.
Trump said this represented the easing of months of tension between the two countries, tensions that in the past saw the U.S. impose steep duties on Indian goods, including a 25 per cent “reciprocal” tariff and an additional 25 per cent levy tied to New Delhi’s continued purchases of Russian crude. He confirmed that the additional Russian oil-related duty would now be dropped as part of the new agreement.
Therefore, linking the trade accord to global geopolitics, Trump asserted that Modi had agreed to end purchases of Russian oil—a claim that, while central to his narrative, was not directly echoed by the Indian prime minister himself in his own statements. Trump wrote that Modi had agreed “to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine.”
Trump also said India would significantly increase purchases of U.S. products, including energy, technology, agricultural, coal and other goods, to the tune of more than $500 billion, although he gave few additional details on the timeline or sectors covered by those purchases.
The American leader described Modi as “one of my greatest friends,” and said that the trade deal would strengthen ties between the world’s largest democracies. He wrote: “Our amazing relationship with India will be even stronger going forward. Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most.”
Prime Minister Narendra Modi thanked Trump for the tariff reduction in a social media post on X, calling the call “wonderful” and welcoming the reduced levy on Made-in-India goods. “Delighted that Made in India products will now have a reduced tariff of 18 per cent. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi said.
However, Modi’s statement made no direct reference to Trump’s claim that India had agreed to halt Russian oil purchases, a point that analysts say could be key to understanding how the deal will unfold.
Financial markets responded positively to the announcement: India’s benchmark stock index, the Nifty, rose sharply at the open, reflecting investor optimism about the new trade terms.
The new deal comes after months of trade friction between Washington and New Delhi over tariffs and energy policy. Last year, the U.S. had slapped elevated duties on Indian imports in response to what it said was New Delhi’s failure to open its markets and reduce its trade surplus with the U.S., and especially over India’s reliance on discounted Russian crude amid the prolonged war in Ukraine.
Trump’s assertion that halting Russian oil imports could help end the Ukraine conflict underscores the broader geopolitical stakes of the deal. Analysts say that while Russia supplies a significant portion of India’s crude needs at discounted prices, shifting away from those imports could have complex consequences for India’s energy security and economic strategy.
At the same time, India has been pursuing broader trade partnerships, including finalising its own trade agreement with the European Union, moves that may have influenced the timing of the U.S.–India negotiations.
Despite Trump’s statements, India has not formally issued policy orders confirming a halt to Russian oil purchases, and some analysts note that commercial contracts and energy market realities could delay or complicate implementation. Modi’s omission of any reference to ending Russian oil imports in his response has led to speculation about how strictly New Delhi intends to follow Trump’s interpretation of their agreement.
