Trump imposed 25% punitive tariffs on India on top of the 25% “reciprocal” tariffs due to India’s purchase of Russian oil.

U.S. President Donald Trump agreed to cut U.S. tariffs on Indian goods from 50% to 18% in exchange for India lowering trade barriers and stopping buying Russian oil in favor of buying oil from the U.S. and possibly Venezuela.

After his phone call with Indian Prime Minister Narendra Modi, Trump posted on social media, “Out of friendship and respect for Prime Minister Modi, and at his request, we have agreed to a trade agreement between the United States and India, effective immediately, in which the United States will charge lower reciprocal tariffs, from 25% to 18%.”

The United States will remove the 25% punitive tariff on all Indian imports of Russian oil, which is on top of a 25% “reciprocal” tariff, a White House official told Reuters.

Trump added that Modi has also pledged to purchase more than $500 billion worth of U.S. energy, technology, agricultural products and other products.

Modi said in a social media post on

“This deal has definitely been a while in the making,” said Rachel Ziemba, adjunct senior fellow at the Center for a New American Society. “18% is close to the level at which Southeast Asian goods are coming into the United States.”

But experts also caution that it may be too early to tell whether this will be a trade deal or a tariff deal.

Veena Najibullah, vice president of research and strategy at the Asia Pacific Foundation of Canada, noted that “Prime Minister Modi welcomed the news but did not reiterate President Trump’s statement that India is reducing tariffs on U.S. goods.” “It currently looks like there is an agreement around tariffs and tariff de-escalation… This is still an important breakthrough.”

trade tensions

The deal comes after months of tense trade talks between the world’s two largest democracies.

Last August, Trump doubled Indian import tariffs to 50% to force New Delhi to stop buying Russian oilIt said earlier this month that without curbs on purchases, interest rates could rise again.

Buying Venezuelan oil will help replace some of the Russian oil purchased by India, the world’s third-largest oil importer.

Ziemba told Al Jazeera that India had been a buyer of Venezuelan oil for years until a year ago. “The question is under what conditions and at what price?”

India relies heavily on oil imports to meet about 90% of its needs, and imports of cheaper Russian oil have helped reduce its import costs since Moscow invaded Ukraine in 2022 and Western countries imposed sanctions on Russian energy exports.

Recently, India has started to slow down its oil purchases from Russia. According to Reuters, production in January was about 1.2 million barrels per day, and is expected to drop to about 1 million barrels per day in February and about 800,000 barrels per day in March.

Indian markets have been hammered since Washington imposed tariffs, making it the worst-performing market among emerging economies in 2025, with foreign investor outflows hitting a record high.

Najibullah said “India will continue to de-risk and diversify” despite the tariff reductions, a process that began amid punitive U.S. tariffs and worsening and unpredictable relations with Washington.

Tariff reduction announced a few days later India and EU reach free trade agreement After nearly two decades of negotiations, this could affect as many as two billion people. The deal will enable free trade in almost all goods between the 27-member EU and India, covering everything from textiles to medicines, and reduce high import taxes on European wine and cars.