U.S. President Donald Trump has announced a new trade agreement with India’s Prime Minister Narendra Modi. American tariffs on Indian goods will drop to 18% from 25%, including a penalty linked to Russian oil imports.
Trump posted on Truth Social after their morning phone discussion, which covered trade and the Russia-Ukraine conflict. “He agreed to stop buying Russian oil, and to buy much more oil from the United States and, potentially, Venezuela,” Trump wrote. India will scrap all trade barriers and buy over $500 billion in U.S. energy, technology, agriculture, and coal.
A White House official confirmed to the BBC that oil-related tariffs will end, leaving a flat 18% rate. Modi welcomed the news on X, saying he is “delighted” an agreement with the U.S. has been reached.
“Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” he said. “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” he added.
The pact follows August 2025 tensions, when Trump set Asia’s highest tariffs at 50% over India’s Russian oil purchases, hitting bilateral trade hard. It comes days after India’s free trade deal with the EU’s 27 nations, dubbed “the mother of all deals” by Ursula von der Leyen.