The United States is reportedly considering a major reduction in tariffs on Indian exports as part of a potential U.S.-India trade agreement, according to a report by Mint on Wednesday. The move could see tariffs slashed to 15–16% from the current 50%, in exchange for India reducing its oil imports from Russia, three unnamed officials familiar with the talks said.
The prospective deal marks a breakthrough in long-stalled trade negotiations between Washington and New Delhi, which have been strained over India’s continued purchases of Russian crude following the invasion of Ukraine.
As part of the discussions, India may also increase its import quota of non-genetically modified U.S. corn—currently capped at 0.5 million tonnes annually—even with an import duty of 15%, Mint reported. Both sides are also working toward establishing a mechanism for periodic reviews of tariffs and market access, ensuring flexibility as global trade dynamics evolve.
Trump-Modi Conversations
On Tuesday, U.S. President Donald Trump said that Indian Prime Minister Narendra Modi had assured him during a phone call that India would scale back its purchases of Russian oil.
“He’s not going to buy much oil from Russia. He wants to see that war end as much as I do,” Trump told reporters aboard Air Force One. “If not, India will continue to pay massive tariffs,” he warned.
In a post on X (formerly Twitter), Modi confirmed the phone conversation but did not reference oil imports. He wrote that India and the U.S. would “continue to stand united against terrorism in all its forms.”
However, confusion emerged when India’s foreign ministry spokesperson later said he was “not aware of any call” between the two leaders, reiterating India’s position that its energy imports are guided solely by national interests and the need to ensure affordable energy for its citizens.
Russian Oil as a Sticking Point
Russia’s discounted crude oil has become a key flashpoint in U.S.-India trade relations. In August 2025, Trump imposed an additional 25% tariff on Indian exports—bringing total duties to 50%—as a penalty for India’s continued oil purchases from Russia.
Indian officials have countered that cutting off Russian oil without a replacement plan could destabilize energy markets and inflate prices globally. They have urged Washington to develop a coordinated supply strategy if Russian barrels are removed from the global market.
A Path Forward
The two nations had earlier set a target of $500 billion in bilateral trade by 2030. However, talks stalled in February after India reportedly resisted opening its agriculture and dairy sectors to U.S. products.
The latest discussions suggest a renewed diplomatic push to repair the trade relationship, which could benefit both sides: Washington by securing a geopolitical win on Russian sanctions enforcement, and New Delhi by regaining favorable trade terms at a critical time for its export-driven economy.
If finalized, the deal could mark one of the most significant resets in U.S.-India trade policy since the Trump administration took office, potentially reshaping economic and strategic ties between the world’s two largest democracies.