- India will buy more oil from the United States and Venezuela, Trump said.
- PM Modi thanks Trump for reducing tariffs on Indian products.
- Modi pledges to buy more than $500 billion worth of American products: Trump.
US President Donald Trump said on Monday that he had reached a trade deal with India that would reduce US tariffs on Indian goods from 50% to 18%, in exchange for India reducing trade barriers, stopping its purchases of Russian oil and purchasing oil from the United States and potentially Venezuela.
“Out of friendship and respect for Prime Minister Modi and, in accordance with his request, effective immediately, we have agreed to a United States-India trade agreement, whereby the United States will impose a reduced reciprocal tariff, reducing it from 25% to 18%,” Trump said in a social media post following a call with Indian Prime Minister Narendra Modi.
A White House official said Reuters that the United States was waiving a punitive 25 percent duty on all imports from India on its purchases of Russian oil, which was in addition to a “reciprocal” tariff rate of 25 percent.
Modi also pledged to purchase more than $500 billion worth of energy, technology, agriculture and other products from the United States, Trump added.
“I am delighted to speak with my dear friend President Trump today. I am delighted that products made in India now enjoy a reduced tariff of 18%,” Modi said in a social media post on X. “Many thanks to President Trump on behalf of the 1.4 billion Indians for this wonderful announcement.”
US-listed stocks of major Indian companies rebounded on the news. IT consultancy firm Infosys rose 3.53 per cent in afternoon trade, consultancy firm Wipro rose 7 per cent, HDFC Bank rose 3.4 per cent and exchange-traded fund iShares MSCI India rose 3.3 per cent.
On Saturday, Trump raised a potential deal for India to buy Venezuelan oil after the United States seized Venezuelan President Nicolas Maduro in a military raid in early January.
The agreement comes after months of tense trade negotiations between the world’s two largest democracies.
Last August, Trump doubled tariffs on imports from India to 50% to pressure New Delhi to stop buying Russian oil, and said earlier this month that rates could rise again if he did not reduce purchases.
Purchases of Venezuelan oil would help replace some of the Russian oil purchased by India, the world’s third largest oil importer.
India relies heavily on oil imports, covering about 90% of its needs, and importing cheaper Russian oil has helped lower its import costs since Moscow invaded Ukraine in 2022 and Western countries imposed sanctions on its energy exports.
India has recently started to slow down its purchases from Russia. In January, they were around 1.2 million barrels per day and are expected to drop to around 1 million bpd in February and 800,000 bpd in March, according to a Reuters report.
Indian markets have been battered since tariffs were imposed by Washington, making it the worst performing market among emerging countries in 2025, with record outflows by foreign investors.
