President Donald Trump announced Monday that he is reducing the tariffs the U.S. imposes on India after the Indian government promised to stop buying Russian oil.
Trump spoke with Indian Prime Minister Narendra Modi on Monday morning, discussing trade and war in Europe, the U.S. president said in a Truth Social post.
“It was an Honor to speak with Prime Minister Modi, of India, this morning,” Trump said. “He is one of my greatest friends and, a Powerful and Respected Leader of his Country.”
What we know about the tariff deal between the U.S. and India
Trump said that Modi “agreed to stop buying Russian oil and to buy much more from the United States and potentially Venezuela,” adding this move will help bring an end to the conflict between Russia and Ukraine.
The president foreshadowed these developments over the weekend.
“India is coming in and they’re going to be buying Venezuelan oil as opposed to buying it from Iran. So we’ve already made that deal, the concept of the deal,” he told reporters on board Air Force One.
Modi conveyed his appreciation in a post on X, saying, “Big thanks to President Donald 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,” said the Indian prime minister, adding, “India fully supports Trump’s vision for peace.”
Trump’s post further stated that he struck a deal with Modi “out of friendship and respect” for the prime minister and lowered the reciprocal tariffs from 25% to 18%.
The White House nullified the additional 25% it levied on Indian imports as a penalty for India’s continued purchase of Russian oil.
Modi pledged to invest in the U.S. market “at a much higher level” in addition to the $500 billion investment in American energy, technology and agriculture by 2030, according to Trump’s post about the high-level conversation.
“Our amazing relationship with India will be even stronger going forward,” Trump said, and championed himself and Modi as leaders who “get things done.”
The full details of this deal aren’t disclosed.
India and U.S. relations could stabilize
India’s ambitions on the world stage have always been split. Its proximity and historic allyship with Russia clash with the collaborative relationship it shares with the U.S., its democratic partner and innovative collaborator.
In December, Russian President Vladimir Putin visited New Delhi, marking his first trip to India since the war began nearly four years ago, as CNN reported.
Even though Modi met Putin with a warm embrace on the tarmac and the meeting showcased a resilient partnership, behind the scenes the relationship struggled as Moscow assured it could supply India with fuel, but New Delhi exercised caution over the offer.
Although Modi and Trump share a good relationship, a few points of contention emerged in public light during Trump’s second term.
While the U.S. called for India to stop buying oil, New Delhi pushed back on Trump repeatedly taking credit for the ceasefire between India and Pakistan.
As the high tariff hung over like a shadow, experts reassured that U.S. and Indian interests naturally align and that neither tariffs nor work visa restrictions would create a major dent.
Eswar Prasad, an international trade expert and economics professor at Cornell University, told Barron’s that this latest trade deal “brings the two countries back into economic and geopolitical alignment.”
“It puts India back in pole position as a major economic and geopolitical ally, especially if the deal is consummated before those with the European Union and South Korea,” Prasad said.
Trump also reposted a photo of an Indian magazine cover featuring him and Modi with the title “The Mover & The Shaker.”