President Donald Trump removed a 25 percent punitive tariff on all imports from India over its purchases of Russian oil, the White House announced on Feb. 6.
“The Interim Agreement between the United States and India will represent a historic milestone in our countries’ partnership, demonstrating a common commitment to reciprocal and balanced trade based on mutual interests and concrete outcomes,” the two countries said in a joint statement.
Trump agreed to slash U.S. tariffs on Indian goods to 18 percent from 50 percent in exchange for India’s halting its purchases of Russian oil and opening its markets to U.S. goods.
India was buying about one-third—about 1.215 million barrels per day—of its total oil imports from Russia, the country’s top supplier of crude. The volume dropped in January under pressure from Western sanctions as refiners looked for alternative suppliers.
The agreement between Trump and Indian Prime Minister Narendra Modi will include more market access commitments and support more resilient supply chains.
Trump announced the deal on Truth Social on Feb. 2, saying India had agreed to move forward with a trade agreement after speaking with Modi.
“He agreed to stop buying Russian Oil, and to buy much more from the United States, and, potentially, Venezuela,” Trump wrote. “This will help end the war in Ukraine, which is taking place right now, with thousands of people dying each and every week!”
The president said he expected the U.S. relationship with India to be “even stronger going forward.”
“Prime Minister Modi and I are two people that get things done, something that cannot be said for most,” Trump said.
As part of the agreement, India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of food and agricultural products, including dried grains, red sorghum for animal feed, nuts, fresh and processed fruit, soybean oil, and wine and spirits.
Modi praised the agreement.
“When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” Modi wrote on social media.
The United States agreed, as part of the plan, to apply an 18 percent tariff rate to goods originating from India, including textiles and clothing, leather, shoes, plastic, chemicals, home decor, and machinery.
The United States will also remove tariffs on certain aircraft and aircraft parts from India that were imposed to eliminate threats to national security.
India intends to buy $500 billion in U.S. energy products, aircraft and aircraft parts, precious metals, tech products, and coal over the next five years as part of the deal.
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