U.S. President Donald Trump announced on Monday that a trade agreement has been reached with India. The deal involves reducing U.S. tariffs on Indian goods from 50% to 18% in exchange for India easing trade barriers, halting the purchase of Russian oil, and considering buying oil from the U.S. and possibly Venezuela.
In a social media post following a conversation with Indian Prime Minister Narendra Modi, Trump stated, “We have agreed to a Trade Deal between the United States and India, lowering the Reciprocal Tariff from 25% to 18% as per Prime Minister Modi’s request.” The White House confirmed the removal of a 25% duty on all imports from India related to Russian oil purchases.
Additionally, Modi committed to purchasing over $500 billion worth of U.S. energy, technology, agricultural products, and other goods. Modi expressed gratitude to Trump for the reduced tariff on Made in India products in a social media post.
India heavily relies on oil imports, with a significant portion coming from Russia. However, recent reports indicate a decline in Russian oil purchases by India, with projections showing a decrease in upcoming months. The move to reduce reliance on Russian oil comes amidst geopolitical tensions and sanctions.
The announcement of the trade deal led to a positive response in the stock market, with shares of major Indian companies listed in the U.S. seeing gains. Infosys, Wipro, HDFC Bank, and the iShares MSCI India exchange-traded fund all experienced notable increases following the news.
Furthermore, it was revealed that Prime Minister Mark Carney is set to visit India in the near future as part of efforts to strengthen economic ties between the two nations. The visit follows discussions on a new trade agreement named Comprehensive Economic Partnership Agreement (CEPA) initiated during a meeting between the leaders at the G20 Summit. Carney had previously accepted Modi’s invitation to visit India in early 2026.
The potential for India to purchase Venezuelan oil was also hinted at by Trump, suggesting a shift away from Russian oil imports. This development follows a period of intense trade negotiations between the U.S. and India, marked by tariff escalations and diplomatic discussions.
The trade deal signifies a significant milestone in the trade relations between the United States and India, with implications for global oil markets and bilateral economic cooperation.
