United States President Donald Trump has declared a new trade agreement with India following a phone call with Indian Prime Minister Narendra Modi on Monday, saying New Delhi has agreed to halt purchases of Russian oil and expand energy and goods imports from the United States and possibly Venezuela.
In a post on his social media platform Truth Social, Trump said he and Modi discussed a range of issues including trade ties and the ongoing war in Ukraine. He said that “out of friendship and respect” for the Indian leader, the United States will immediately reduce its reciprocal tariff rate on Indian imports from 25 per cent to 18 per cent, while India will cut tariffs on U.S. goods to zero.
Trump wrote that Modi agreed to stop buying Russian oil and will instead purchase significantly more energy from the United States and, potentially, Venezuela. The U.S. president framed this commitment as part of efforts to help bring an end to the war in Ukraine.
Describing Modi as “one of my greatest friends, and a powerful and respected leader of his country,” Trump also said India would commit to large-scale purchases of American products. He projected that India would buy more than $500 billion worth of U.S. energy, technology, agricultural goods, coal, and other items.
Reactions from New Delhi
Prime Minister Modi took to X (formerly Twitter) to welcome the announcement, thanking Trump on behalf of India’s 1.4 billion people for the tariff reduction.
Modi said cooperation between the world’s two largest democracies will benefit their populations and “unlock immense opportunities for mutually beneficial cooperation.” He described Trump’s leadership as “vital for global peace, stability, and prosperity” and said he looked forward to expanding bilateral ties.
Background and Broader Context
The deal marks a de-escalation of tensions that followed months of tough trade negotiations. In 2025, the U.S. had imposed steep tariffs — in some cases rising to 50 per cent — on Indian goods, including punitive levies linked to India’s continued purchases of discounted Russian crude. Critics in India had argued those tariffs unfairly targeted the economy and threatened exporters.
Under the new agreement, the United States is also dropping a separate 25 per cent tariff that had been applied over India’s Russian oil purchases as part of the broader trade reset.
The pact comes as India continues to diversify its energy sources and trade partnerships, including a recent free-trade agreement with the European Union, even as global markets watch how relations between Washington and New Delhi evolve in the context of geopolitical tensions.