Trump Slashes India Tariffs After Modi Agrees To Drop Russian Oil, Go Full ‘BUY AMERICAN’

In a huge Monday development, President Trump has announced the US will trim its punitive 25% tariff on Indian imports to 18% after striking what he hailed as a new “trade deal” with Indian Prime Minister Narendra Modi. Crucially it hinges on New Delhi having reportedly ended its purchases of Russian crude and swapping them for massive US energy and goods buys.

In a Truth Social post, Trump portrayed the agreement as a major geopolitical win, saying that India “agreed to stop buying Russian oil, and to buy much more from the United States and, potentially, Venezuela,” and crucially framing the move as helping “END THE WAR in Ukraine.”

Under the newly touted deal, according to breaking details.:

• The United States will cut its “reciprocal tariff” on Indian goods from 25% to 18%, effective immediately.

• India will slash its tariffs and non-tariff barriers on American products to zero.

• Modi has pledged a gargantuan “BUY AMERICAN” commitment, including upwards of $500 billion in U.S. energy, technology, farm, coal, and other exports.

Trump cast the concessions as evidence of deep bilateral “friendship and respect,” insisting the deal marks a new chapter in US-India trade and energy ties. This will of course also be a blow to Moscow’s oil lifeline.

Bloomberg notes:

The White House did not immediately respond to a request for comment on if Trump was lowering the reciprocal tariff and eliminating the extra penalty over Russian oil purchases, or simply reducing one of the rates. India’s benchmark stock index Nifty 50’s futures traded at the Gujarat International Fin-Tec City surged as much as 3.8% in thin trading, while the US-listed iShares MSCI India ETF hit session highs and rose as much as 2.4%. The rupee rallied in ofshore trading, gaining 1% against the dollar.

The shift represents a dramatic retreat from the brash tariff escalation of 2025, when Washington first slapped India with steep levies, including a 25% penalty linked explicitly to Russian energy imports, in a bid to choke Delhi’s crude trade with Moscow. The pressure appears to be working, to say the least.

But the shift in energy sourcing won’t be easy or happen overnight, as India has been importing around 1.5 million barrels per day of Russian crude, even months after Trump added tariffs on Indian goods as punishment, global trade tracker Kpler reports. Indian officials defended those purchases as vital to energy security.

On the trade front, America’s biggest imports from India last year included computers and other electronics such as smartphones, pharmaceuticals, apparel, and chemicals. Along with oil and gas, India has long imported US aircraft and aviation parts.

“Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%,” Trump posted. “Our amazing relationship with India will be even stronger going forward.”