WASHINGTON – President Donald J. Trump said Monday that he reached a new trade deal with India after a phone call with Prime Minister Narendra Modi, and that the agreement takes effect immediately.
In a statement, Trump said the United States will lower its “reciprocal” tariff on Indian goods from 25% to 18%, while India will “move forward” to cut its tariffs and non-tariff barriers against the United States to zero. He also said Modi agreed to stop buying Russian oil and instead purchase substantially more energy from the U.S., and “potentially” Venezuela, a shift Trump argued would help end the war between Russia and Ukraine.
Trump also said Modi committed to “BUY AMERICAN” at a higher level, including more than $500 billion in U.S. energy, technology, agricultural products, coal, and other goods.
The tariff backstory: Trump’s “reciprocal” squeeze strategy
Trump’s announcement lands after months of escalating tariff pressure aimed at forcing concessions from major trading partners, especially those the administration argues benefit from persistent U.S. trade deficits.
Under Trump’s reciprocal-tariff framework, the U.S. has repeatedly adjusted country-specific rates, using tariffs both as leverage in trade talks and as a penalty tied to broader policy disputes. In India’s case, tensions intensified as the U.S. pressured New Delhi over continued purchases of discounted Russian crude.
Reuters’ timeline of the U.S.–India tariff dispute describes a rapid escalation in 2025, from an initial reciprocal tariff on Indian imports, to a temporary pause that left a 10% duty in place, and then a sharp ramp-up later in the year as Washington warned India over Russian oil.
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Oil, Ukraine, and why this deal matters now
Trump is framing the trade deal as part of a larger push to choke off Russia’s war financing by redirecting a major buyer away from Moscow’s barrels. India became a major purchaser of Russian crude after 2022 as sanctions reshaped global oil flows and discounts widened.
The new pledge Trump described, India halting Russian oil buys and shifting toward U.S. (and possibly Venezuelan) supplies, would be a major geopolitical and market move if carried out as stated. As of Monday, public details remained limited beyond Trump’s announcement, and reporting noted that full terms and confirmations were still emerging.
