President Donald Trump announced Monday that the United States and India have finalized a new trade deal that lowers tariffs on Indian imports and reshapes India’s energy purchases, following a phone call with Indian Prime Minister Narendra Modi.
Under the deal, the U.S. will reduce its reciprocal tariff on Indian goods from 25% to 18%, while India has agreed to cut its tariffs and non-tariff barriers on American products to zero. Trump said the agreement also includes a major commitment from India to significantly increase purchases of U.S. goods, totaling more than $500 billion across sectors such as energy, technology, agriculture, and coal.
A central element of the deal involves energy imports. Trump said Modi agreed to stop buying Russian oil and instead source more crude from the United States and “potentially” Venezuela. India has been one of Russia’s largest oil customers during the war in Ukraine, importing roughly 1.5 million barrels per day, according to global trade data. Trump framed the shift as a step that could help pressure Moscow and contribute to ending the conflict.
Trump referred to Modi as “one of my greatest friends” and said India also plans to invest in American products “at a much higher level” beyond the $500 billion commitment. The President wrote on Truth Social: “He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week! Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%. They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO.”
While Trump did not specify how quickly India could replace Russian oil, analysts note that Venezuela’s oil sector would require significant investment to substantially increase output. The White House also did not clarify whether additional penalties tied to Russian oil purchases would remain in effect during the transition.
Although India is not among the United States’ top trading partners, the deal could still have a notable impact. In 2025, the U.S. imported $95.5 billion in goods from India and exported $42 billion worth of products to the country, according to U.S. Census Bureau data.
Modi later confirmed the agreement and welcomed the reduced tariffs: “Delighted that Made in India products will now have a reduced tariff of 18% Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement. When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”
The announcement comes shortly after India finalized a separate trade agreement with the European Union, underscoring New Delhi’s broader push to expand global trade ties amid shifting geopolitical and economic pressures.
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