Donald Trump said Monday that he plans to reduce tariffs on Indian products after Prime Minister Narendra Modi agreed to stop buying Russian oil, a shift the U.S. president tied to the broader effort to pressure Moscow over its war in Ukraine. Trump said the tariff rate on Indian goods would fall to 18% from 25%, and he also said India would begin cutting its import taxes on U.S. products to zero and buy U.S. goods worth $500 billion.
In a post on Truth Social, Trump framed the trade changes as part of efforts to reduce the flow of money tied to Russia’s oil revenue, saying the approach would help end what he described as the war in Ukraine that is happening “now” as thousands die each week. In the same announcement, he reiterated that the tariff reductions follow months of U.S. pressure for India to reduce its reliance on cheaper Russian crude, which India expanded after countries tried to isolate Russia following its invasion of Ukraine in February 2022.
Modi responded publicly through a post on X. The AP reported that Modi wrote that he was “encantado” with the tariff reduction announced by Trump, and he said Trump’s leadership was “vital” for peace, stability and global prosperity. Modi also said he would “Espero trabajar estrechamente con él para llevar nuestra asociación a alturas sin precedentes,” according to the AP’s reporting.
The AP described the U.S.-India negotiation as occurring against a backdrop of earlier tariff actions that Trump said were meant to change India’s trading behavior. In June, Trump announced a 25% tariff on Indian products after his administration said India had done “very little” to reduce its trade surplus with the United States and open markets to U.S. goods. In August, Trump imposed additional 25% import taxes on Indian products tied to India’s acquisitions of Russian oil, raising the combined tariff increase to 50% before the newly proposed reduction.
The AP said the revised tariff rate could bring India closer to rates other countries face, noting that with the lower rate the tariff on Indian products would be 18%, near the 15% rate charged to European Union and Japanese products among others. It also said that historically India’s relationship with Russia has focused more on defense than energy, with Russia supplying a smaller share of India’s oil while providing much of its military equipment—though India increased Russian oil purchases after the invasion as discounted prices helped support energy supplies.
The announcement also came shortly after India and the European Union reached an agreement for free trade, according to the AP. The reported deal, after nearly two decades of negotiations, would allow free trade of nearly all products between the EU’s 27 members and India, including sectors such as textiles and pharmaceuticals, and would reduce high EU import taxes on items including wine and automobiles. The AP said that the EU-India agreement also reflected a desire to reduce reliance on the United States after Trump’s tariff increases disrupted existing trade flows.
According to the AP, U.S. officials expected additional diplomacy soon involving Russian and Ukrainian representatives. A White House official, who requested anonymity, told the AP that Trump’s special envoy Steve Witkoff and Jared Kushner plan another round of tripartite talks in Abu Dhabi this week, with the goal of finding a way to halt the war. The AP also reported that Trump believes targeting Russian oil revenue is the best way to get Moscow to end its nearly four-year war with Ukraine and that the view aligns with Trump’s preference for tariff-based pressure.
The AP said U.S. officials faced trade-offs as they pushed for market access. It reported that Washington was seeking greater access for exports and zero tariffs on most U.S. shipments, while Indian officials expressed reservations about opening sectors such as agriculture and dairy. The AP also cited a U.S. Census Bureau report that the United States had a goods trade imbalance of $53.5 billion with India during the first 11 months of last year, meaning the United States imported more from India than it exported. With a population exceeding 1.4 billion, India is widely seen by government officials and business leaders as a major geopolitical and economic counterweight to China.