Quick overview

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President Donald Trump promised to remove punitive tariffs on India in exchange for Prime Minister Narendra Modi ceasing to purchase Russian oil. Trump announced on social media that he would lower the US levy on Indian goods from 25 percent to 18 percent after speaking with Modi over the phone.

According to officials familiar with the situation, the US president is also lifting an additional punitive 25 percent duty that was imposed in response to India’s purchases of crude from Russia. Trump wrote that India would “move forward to reduce their tariffs and non-tariff barriers against the United States, to ZERO” and buy “over 500 BILLION DOLLARS of U.S. Coal, energy, technology, agriculture, and numerous other goods

Modi announced on social media that “Made in India products will now have a reduced tariff of 18 percent,” confirming the agreement. He gave no additional information on oil or agricultural imports, which are two of New Delhi’s main points of contention.

India has not historically imported Russian crude, but after Moscow’s 2022 invasion of Ukraine, when trade flows were disrupted, and bargains became alluring, it became a significant buyer. Shipments have slowed but not stopped as a result of the Trump administration’s attempts to cut off Russia’s supplies to India.

Trump also declared in October that Modi had consented to stop buying Russian oil. However, Indian refiners kept buying cheap crude from Moscow in the absence of a solid trade agreement.