India-US Trade Deal: Tariff Cuts Announced, Silence on Russian Oil Raises Questions

A long-anticipated trade agreement between India and the United States appears close to fruition, with US President Donald Trump announcing a reduction in tariffs on Indian goods from 50 per cent to 18 percent, following what he described as successful discussions with Prime Minister Narendra Modi.

Speaking publicly, US President Donald Trump said that bilateral trade disputes had largely been resolved and claimed that Prime Minister Modi had agreed to all major terms during a recent phone conversation. “That is why we are reducing tariffs on India,” he said, adding that the US intends to gradually move towards zero tariffs.

Prime Minister Modi, welcoming the development, described the agreement as a “great deal” and expressed gratitude on behalf of the Indian people. However, notable omissions in New Delhi’s response have triggered fresh speculation over the fine print of the proposed arrangement.

Tariff reduction: key details still unclear

At present, Indian exports to the US attract tariffs of up to 50%, comprising 25% retaliatory duties and an additional 25% penalty tariff. Mr. Trump announced that tariffs would be brought down to 18%, with further reductions envisaged in the future.

What remains unclear, however, is whether the reduction applies to the full 50% or only to the base 25% component. The Indian government has yet to issue a clarification on this crucial detail.

Russian oil claim meets strategic silence

More controversially, Mr. Trump claimed that India had agreed to completely halt crude oil imports from Russia as part of the broader trade understanding. This assertion did not feature in Prime Minister Modi’s message of thanks, nor did New Delhi respond to the US President’s statement that India would significantly ramp up purchases of American products.

This is not the first time Mr. Trump has made public claims regarding India’s Russian oil imports. On previous occasions, the Indian government had openly rejected such assertions, stating that its energy decisions were guided solely by national interest and not by external pressure.

This time, however, New Delhi has maintained silence—a move analysts describe as “strategic restraint”, possibly aimed at balancing relations with both Washington and Moscow.

Has India stopped buying Russian oil?

Available data suggests that India has not fully stopped importing Russian crude. In 2024, India imported Russian oil worth approximately $52.7 billion. While imports showed a decline towards the end of 2025, purchases have continued into January 2026, with public sector refiners Indian Oil Corporation (IOCL) and Bharat Petroleum Corporation Ltd (BPCL), along with private refiner Nayara Energy, still sourcing crude from Russia.

India’s dependence on Russian oil was negligible—around 2%—until 2022. Following the Russia–Ukraine conflict, India sharply increased purchases, drawn by steep discounts. Russian crude soon emerged as a major component of India’s import basket.

In 2025, several factors contributed to a moderation in imports: reduced discounts from Russia, increased supplies from West Asia, and pressure stemming from US tariff and sanctions rhetoric. While total crude imports touched 21.6 million tonnes in December 2025—the highest in nine months—imports of Russian oil in January 2026 were down nearly 35% compared to November.

Large private refiners, including Reliance Industries, have scaled back Russian purchases, though state-owned firms continue limited buying.

Russia Yet To Respond

Russia has not responded to Donald Trump’s latest remarks. In the past, Moscow had expressed concern that curbs on Indian imports could impact its oil market, while reiterating confidence that India, a long-standing partner, would not yield to external pressure.

Analysts warn that a complete halt in Indian imports could weaken Russia’s position in the Asian energy market.

At a glance

India: Welcomes US tariff reduction but remains silent on Russian oil imports

United States: Claims India has agreed to halt Russian crude purchases

Russia: Yet to react; potential concerns over losing market share in Asia

With questions lingering over tariff calculations and energy commitments, official clarifications from New Delhi are keenly awaited.