Trump plans to lower tariffs on Indian goods to 18% after India agreed to stop buying Russian oil

WASHINGTON– President Donald Trump said Monday he plans to cut tariffs on goods from India from 25% to 18%, after Indian Prime Minister Narendra Modi agreed to stop buying Russian oil.

The move comes after months of Trump pressuring India to stop relying on cheap Russian crude. India benefited from falling Russian oil prices as much of the world sought to isolate Moscow ahead of its February 2022 invasion of Ukraine.

Trump said India would also begin reducing its import taxes on U.S. goods to zero and buying $500 billion worth of U.S. goods.

“This will help end the war in Ukraine, which is currently taking place and causing thousands of deaths every week!” ” Trump said in a Truth Social article announcing the tariff cut on India.

Modi posted on

“I look forward to working closely with him to take our partnership to unprecedented heights,” Modi said.

Trump has long enjoyed warm relations with Modi, but these have been complicated recently by Russia’s war in Ukraine and trade disputes.

Trump has struggled to deliver on his campaign promise to quickly end the war between Russia and Ukraine and has been reluctant since returning to power to pressure Russian President Vladimir Putin. He simultaneously imposed tariffs without going through Congress to achieve his economic and foreign policy goals.

The announcement of the India deal comes as his special envoy, Steve Witkoff, and his son-in-law Jared Kushner are expected to hold a new round of three-way talks with Russian and Ukrainian officials in Abu Dhabi later this week in an effort to find an endgame to the war, according to a White House official who requested anonymity to describe the upcoming meeting.

Trump has said he believes targeting Russia’s oil revenues is the best way to get Moscow to end its nearly four-year war with Ukraine, a view that is consistent with his commitment to tariffs.

In June, Trump announced that the United States would impose 25% tariffs on goods from India after his administration said the country had not done enough to reduce its trade surplus with the United States and open its markets to American goods. In August, Trump imposed additional 25% import taxes on Indian goods due to his purchases of Russian oil, bringing the combined rate increase to 50%.

With the pledge to stop buying Russian oil and the rate cut, the tariff rate on Indian goods could fall to 18%, which is close to the 15% rate applied to goods from the European Union and Japan, among other countries.

Historically, India’s relations with Russia have revolved more around defense than energy. Russia supplies only a small fraction of India’s oil, but the majority of its military hardware.

But India, in the aftermath of the Russian invasion, took advantage of the opportunity to buy discounted Russian oil, allowing it to increase its energy supplies, while Russia sought deals to revive its beleaguered economy and continue paying for its brutal war.

The announced tariff cut comes days after India and the European Union reached a free trade deal that could affect up to 2 billion people after nearly two decades of negotiations. The deal would allow free trade in almost all goods between the 27 EU members and India, ranging from textiles to medicines, and reduce high import taxes on wine and European cars.

The deal between two of the world’s biggest markets also reflects a push to reduce reliance on the United States after Trump’s import tax increases disrupted established trade flows. Although the cost of Trump’s tariffs has been largely borne by U.S. businesses and consumers, these taxes can reduce trade volumes between countries.

In recent months, India has accelerated its efforts to finalize several trade agreements. It signed an agreement with Oman in December and concluded negotiations for an agreement with New Zealand.

Trump appeared to hint at a positive call with Modi on Monday morning, posting on social media a photo of the two of them on the cover of a magazine.

When the two men met last February, the US president said India would start buying US oil and natural gas. But negotiations proved frustrating, and tariffs imposed last year by Trump did little to change India’s initial objections.

As the United States seeks greater market access and zero tariffs on almost all its exports, India has expressed reservations about opening up sectors such as agriculture and dairy, which employ much of the country’s population for a living, Indian officials said.

The Census Bureau reported that the United States recorded a $53.5 billion merchandise trade imbalance with India in the first 11 months of last year, meaning it imported more than it exported.

With a population of more than 1.4 billion, India is the world’s most populous country and is seen by many government officials and business leaders as a geopolitical and economic counterweight to China.

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Roy reported from New Delhi, India.