President Donald Trump said Monday the United States plans to lower tariffs on goods from India to 18 percent, down from 25 percent, after Indian Prime Minister Narendra Modi agreed to halt purchases of Russian oil, a move Trump cast as both an economic reset and a step toward ending the ongoing war in Ukraine.
The announcement followed a call between the two leaders and comes after months of pressure from Trump on India to reduce its reliance on discounted Russian crude. Since Russia’s February 2022 invasion of Ukraine, India has sharply increased oil imports from Moscow as Western nations moved to isolate the Kremlin through sanctions.
Trump said the agreement would also see India reduce import taxes and non‑tariff barriers on U.S. goods to zero and commit to buying roughly $500 billion worth of American products, including energy, technology and agricultural exports.
Trump Links Trade Deal to Push to End Ukraine War
Trump explicitly tied the tariff reduction and India’s shift away from Russian oil to his broader effort to bring an end to the war in Ukraine, which has now dragged on for nearly four years.
“This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week!” Trump wrote in a post on Truth Social announcing the deal.
The president has repeatedly argued that curbing Russia’s oil revenue is the most effective way to pressure Moscow into negotiations, a view that aligns with his heavy reliance on tariffs as a foreign policy tool. Since returning to office, he has frequently imposed import taxes without going through Congress to advance economic and diplomatic objectives.
At the same time, Trump has struggled to fulfill a campaign pledge to quickly end the conflict and has been reluctant to directly confront Russian President Vladimir Putin, drawing criticism from allies who favor a harder line against Moscow.
Modi Welcomes Tariff Cut, Praises Trump’s Leadership
Modi responded positively to the announcement, saying he was “delighted” by the planned tariff reduction and praising Trump’s leadership.
“President Trump’s leadership is vital for global peace, stability, and prosperity,” Modi wrote in a post on X. “I look forward to working closely with him to take our partnership to unprecedented heights.”
Trump and Modi have long portrayed their relationship as warm, but it has become more complicated in recent years amid the war and disputes over trade imbalances and market access.
Tariffs Shift After Months of Escalation
The agreement represents a sharp reversal from trade actions Trump imposed last year. In June, the administration announced a 25 percent tariff on Indian goods, arguing that New Delhi had done too little to narrow its trade surplus with the U.S. or open its markets to American exports.
In August, Trump imposed an additional 25 percent import tax on Indian products, explicitly linking the move to India’s purchases of Russian oil. Together, the measures pushed tariffs on Indian goods to 50 percent.
With India now committing to stop buying Russian crude, Trump said tariffs could fall to 18 percent, a level closer to rates applied to goods from the European Union (EU) and Japan, which hover around 15 percent.
India’s Oil Calculus and Its Ties to Russia
Historically, India’s relationship with Russia has been driven more by defense cooperation than energy. Moscow supplies the bulk of India’s military hardware, while accounting for only a small share of its oil imports before the Ukraine war.
That balance shifted after the invasion as Russia offered steep discounts to maintain export revenues. India took advantage of lower prices to boost its energy supplies, while Moscow sought new buyers to support its economy and continue financing the war.
Trump has increasingly framed India’s oil purchases as undermining Western efforts to isolate Moscow, even as U.S. officials have acknowledged India’s complex geopolitical position and long‑standing ties to Russia.
Diplomacy Continues as U.S. Envoys Head to Abu Dhabi
The announcement comes as Trump’s diplomatic push on ending the war continues. His special envoy, Steve Witkoff, and Trump’s son‑in‑law Jared Kushner, are expected to participate in another round of talks with Russian and Ukrainian officials later this week in Abu Dhabi, according to a White House official who requested anonymity to discuss the plans.
Trump has suggested that reducing Russia’s energy revenue through sanctions and shifting global demand could help force Moscow toward a negotiated settlement, though critics say his approach has so far yielded limited results.
India Accelerates Trade Push Beyond the U.S.
The tariff deal with Washington also comes as India deepens trade ties elsewhere. Days earlier, India and the EU finalized a long‑awaited free trade agreement after nearly two decades of negotiations.
That pact would allow free trade on nearly all goods between India and the EU’s 27 member states, affecting up to 2 billion people and lowering high import taxes on items ranging from textiles and medicines to wine and automobiles.
The agreement reflects a broader effort by India and other major economies to diversify trade relationships after Trump’s import taxes disrupted established global supply chains. Economists note that while tariffs are paid by importers, the costs are often passed on to consumers and can reduce trade volumes over time.
India has also moved to finalize other trade agreements, signing a deal with Oman in December and concluding talks with New Zealand.
Trade Imbalance and Strategic Stakes
According to the Census Bureau, the U.S. ran a $53.5 billion trade deficit in goods with India during the first 11 months of last year, importing far more than it exported.
With a population exceeding 1.4 billion, India is the world’s most populous country and is widely viewed by U.S. policymakers and business leaders as a key growth market and a strategic counterweight to China.
Trump appeared to hint at the significance of the agreement earlier Monday, posting a magazine cover image of himself with Modi on social media.
When the two leaders met last February, Trump said India would begin buying American oil and natural gas, though talks stalled and the tariffs imposed later in the year initially did little to shift India’s position.
While Washington has pushed for zero tariffs on most U.S. exports, Indian officials have been cautious about opening politically sensitive sectors such as agriculture and dairy, which employ large portions of the population and remain central to domestic livelihoods.
This article includes reporting by the Associated Press.
Updates: 2/2/26, 3:04 p.m. ET: This article was updated with new information and remarks.
Updates: 2/2/26, 5:12 p.m. ET: This article was updated with new information.
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