Trump lifts India tariff after Russian oil deal
New Delhi said it will buy US energy products and committed to a framework expanding defense cooperation with Washington for ten years.
The tariff was earlier imposed because India was buying oil from Russia. This step follows a trade deal that Trump announced earlier this week.
The decision was confirmed through an executive order signed by Trump. The order said India has agreed to stop importing oil from the Russian Federation, either directly or indirectly. The move is linked to the ongoing war in Ukraine, which the United States wants to see end.
The executive order also noted that India has promised to buy energy products from the United States. Along with this, New Delhi has committed to a new framework to expand defense cooperation with Washington over the next ten years. This includes closer military ties and future cooperation.
The additional 25 percent duty will be lifted at 12:01 am Eastern Time on Saturday. This means Indian goods entering the US market will face lower taxes starting immediately after that time.
Trump announced the trade deal just days before signing the order. He said that Indian Prime Minister Narendra Modi had personally promised to stop buying Russian oil. Trump linked this promise to the broader effort to pressure Russia over the Ukraine war.
Under the agreement, the United States will also cut what it calls reciprocal tariffs on Indian products. These tariffs will drop to 18 percent from the earlier level of 25 percent. This change is expected to help Indian exporters sell more goods in the US market.
The deal includes other benefits as well. According to a separate joint statement released by the White House on Friday, tariffs on certain aircraft and aircraft parts will be removed. This could help both US manufacturers and Indian buyers in the aviation sector.
The statement also said that India plans to buy about 500 billion dollars worth of US goods over the next five years. These purchases will include energy products, aircraft and parts, precious metals, technology items, and coking coal. The scale of this commitment is seen as very large.
This shift marks a big drop in US tariffs on Indian products. Late last year, some Indian goods were facing tariff rates as high as 50 percent. Now, with the new deal, the overall burden on Indian exports will be much lower.
The agreement helps ease months of tension between the two countries. The main issue had been India’s continued purchase of Russian oil. Washington has said that such purchases help fund a war it is trying to stop. India, on the other hand, argued it needed the oil for its energy security.
With this deal, both sides appear to have found common ground. India gets relief from high tariffs and better access to the US market. The United States gains a major buyer for its energy products and a stronger defense partner in Asia.
The deal also helps restore close personal ties between Trump and Prime Minister Modi. Trump has often spoken warmly about Modi in the past. He has described the Indian leader as one of his greatest friends. The new agreement seems to reflect that relationship.
Experts say the new 18 percent tariff level could give Indian exporters a small advantage. Wendy Cutler, senior vice president at the Asia Society Policy Institute, said this week that competitors in the region face tariffs of around 19 to 20 percent. Even a small difference can matter in global trade.
Indian businesses are expected to welcome the news. Lower tariffs can make Indian goods cheaper and more attractive in the US. This could help sectors like textiles, engineering goods, and chemicals.
US companies also stand to gain. The promise of large Indian purchases means more demand for American energy, planes, and technology. This could support jobs and investment in the United States.
Still, some questions remain. It is not yet clear how quickly India will fully stop Russian oil imports. There are also details of the defense cooperation framework that have not been made public yet. Both sides say more talks will follow.
For now, the mood appears positive. The lifting of the extra tariff sends a clear signal that the two countries want to move forward. After months of strain, the trade deal marks a fresh chapter in US India relations.