U.S. drops India tariffs to 18% as New Delhi pivots from Russian oil to American energy

U.S. President Donald Trump has announced a major trade agreement with India, marking a significant shift in global energy and trade dynamics. According to Reuters, under the deal, the United States will lower customs duties on Indian goods from 50% to 18%. In exchange, India has committed to halting its purchases of Russian oil and reducing various trade barriers.

Trump shared the news via social media following a telephone conversation with Indian Prime Minister Narendra Modi. He stated that India will now source its oil requirements from the United States or Venezuela. Furthermore, New Delhi has agreed to purchase over $500 billion worth of U.S. products, including energy carriers like coal, as well as technology, agricultural goods, and other commodities.

According to Trump, India will also take steps to reduce both tariff and non-tariff barriers on U.S. imports toward zero. Prime Minister Modi expressed his gratitude to his American counterpart on social media, describing the decision as a "vital step for the people of India."

A White House spokesperson confirmed to Reuters that the U.S. will remove the additional 25% duty previously imposed on India due to its purchases of Russian oil. These tariffs had been implemented as a "retaliatory measure." Last August, Trump had raised import duties to 50% as a means of exerting pressure on India.

While the exact date the agreement takes effect remains unconfirmed, as does the specific timeline for the total phase-out of Russian oil, trends indicate a steady decline. In recent months, India has been gradually reducing Russian oil imports: from approximately 1.2 million barrels per day in January to a projected 1 million in February and potentially 800,000 barrels per day by March.