Trump says he'll lower tariffs on India after Modi agrees to stop buying Russian oil

U.S. Chair Donald ruff on mon said he had in agreement(p) on a merchandise deal ​with India that slashes U.S. Tariffs on Indian goods to 18 per cent from 50 per cent in exchange for India lowering trade barriers, stopping its purchases of Russian oil and buying oil instead from the U.S. And potentially Venezuela.

“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 per cent to 18 per cent,” Trump said in a social media post following a call with Indian Prime Minister Narendra ⁠Modi.

A White House official told Reuters that the U.S. Was also rescinding a punitive, 25 per cent duty on ‍all imports from India ⁠over its purchases of Russian oil that had stacked on ​top of a 25 per cent "reciprocal" tariff rate.

Modi also committed to buy more than $500 billion US worth of U.S. Energy, technology, agricultural and other products, Trump added.

"Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18 per cent," Modi said in a social ⁠media post on X. "Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement."

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India relies heavily on oil imports, covering around 90 per cent of its needs, ‍and importing cheaper Russian oil has helped lower its import costs since Moscow invaded Ukraine in 2022 and Western nations slapped sanctions on its energy exports.

Recently India has ‍begun to slow its purchases ⁠from Russia. In January, they were around 1.2 million barrels per day, and are projected to decline to about one million in February and 800,000 in March, according to a Reuters report.

Indian markets have been battered since Washington levied the tariffs, making it the worst-performing market among emerging nations in 2025, with record outflows of foreign investors.

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U.S.-listed shares of major Indian companies rallied on the news. IT consulting firm Infosys was up 3.53 per cent in afternoon trading, consultancy ‍Wipro rose seven per cent, HDFC Bank gained 3.4 per cent and the iShares MSCI India exchange-traded fund rallied 3.3 per cent.

Prime Minister Mark Carney will visit India in the coming weeks, according to India’s high commissioner to Canada, as both countries look to diversify trading partners in the face of Trump’s trade war.

Carney’s visit follows a commitment by both leaders to launch negotiations toward a new trade deal called a Comprehensive Economic Partnership Agreement (CEPA), announced when the two leaders met at the G20 Summit in South Africa last November. 

At the time Carney's office said he had accepted Modi’s invitation to visit India "in early 2026."

On Saturday, Trump teased a potential deal for India to buy Venezuelan oil after the U.S. Seized Venezuelan President Nicolas Maduro in a military raid in early January.

The deal comes after months of tense trade negotiations between the world's two largest ⁠democracies.

Last August, Trump doubled duties on imports from India to 50 per cent to pressure New Delhi to stop buying Russian oil, and earlier this month said the ​rate could rise again if it did not curb its purchases.

Purchases of Venezuelan oil would help replace some of ​the Russian oil bought by India, the world's third-biggest oil importer.

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