President Donald Trump said the US has reached an initial trade agreement with India, reducing tariffs in exchange for energy and trade commitments from New Delhi.
Under the deal, US tariffs on Indian goods fall from 25% to 18% effective immediately, according to Trump. In return, India agreed to reduce its own tariffs and non tariff barriers on US products and to stop buying Russian oil.
What Trump says India agreed to
- End purchases of Russian oil
- Buy significantly more US goods, including energy, technology, agriculture, and coal
- Reduce Indian tariffs and non tariff barriers on US products, with Trump saying some will go to zero
- Shift energy imports toward the US and potentially Venezuela
Trump claimed India could buy over $500 billion worth of US products over time.
Cooling a tariff dispute
India had faced steep US tariffs during Trump’s global trade push, including a 25% levy that was increased last year over India’s continued Russian oil purchases. This agreement partially rolls back those penalties and signals a reset in relations.
Modi’s response: Prime Minister Narendra Modi welcomed the tariff cut, calling it a boost for cooperation between the world’s largest democracies. He did not provide details on the timeline for reducing Russian oil imports.
Why it matters
The deal carries both economic and geopolitical weight, tying tariff relief to energy flows and pressure on Russia. Key details remain unclear, including which products qualify for zero tariffs and how quickly India can replace Russian oil.
For now, the agreement eases trade tensions but leaves markets waiting for formal terms and follow up negotiations.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
Related: Gold and Silver Crashed. Here’s What Really Happened and Why It Matters
