U.S. Reduces Tariffs on Indian Goods in Exchange for Stopping Russian Oil Imports

Feb 03, 2026
International

File Image: U.S. President Donald Trump imposed a 50% tariff on India, causing significant business losses, as the U.S. is an important market for many Indian industries (Collected | Al Jazeera | Ivan Vucchi/AP)

International Desk: PNN

U.S. President Donald Trump has announced a significant reduction in tariffs on Indian goods. According to the new decision, U.S. tariffs on Indian products will be reduced from 50 percent to 18 percent. In return, India has committed to easing trade barriers, stopping oil imports from Russia, and increasing energy imports from the U.S. and potentially Venezuela.

Following a phone conversation with Indian Prime Minister Narendra Modi, Trump stated on social media that the trade agreement between the U.S. and India was reached based on Modi’s request and mutual goodwill. Under this agreement, the immediate reduction of U.S. tariffs on Indian goods will take effect.

A White House official stated that the additional 25 percent punitive tariff imposed on India due to Russian oil imports has also been withdrawn. This ends the previous doubled tariff system.

As part of the agreement, India has pledged to purchase more than $500 billion worth of products from the U.S. in sectors including energy, technology, and agriculture.

Prime Minister Modi welcomed the tariff reduction, calling it an extremely positive development and a significant achievement for over 1.4 billion Indians.

Analysts say this agreement is a major step after years of tension, although it is not yet clear whether it constitutes a full free trade agreement or just a tariff-related understanding. However, it is expected to improve India’s competitive position in the U.S. market, similar to countries in Southeast Asia.

Previously, Washington increased tariffs on Indian goods to pressure India to stop buying oil from Russia. The impact was also felt in the Indian stock market, where foreign investment withdrawals increased. This recent tariff reduction is expected to bring some relief to India.

Meanwhile, after lengthy discussions, India and the European Union concluded a free trade agreement, which could further strengthen India’s position in global trade.