In a significant step toward finalizing the long-pending India-US trade deal, Washington may reduce tariffs on Indian imports from the current 50% to around 15–16%, according to a report by news agency. The tariff reduction is reportedly linked to India’s decision to scale down its purchases of Russian oil and open its agriculture market to select US products.
The United States had earlier imposed an additional 25% tariff on Indian goods, citing New Delhi’s continued reliance on Russian crude—a move Washington said indirectly funded the Russia-Ukraine conflict. However, with India now signaling willingness to diversify crude sourcing and expand trade cooperation, the two sides appear closer to resolving their long-standing trade impasse.
Energy and Agriculture Drive Trade Talks
According to sources cited by a popular news agency, India may ease restrictions on imports of non-genetically modified (non-GM) US corn and soymeal, as rising demand from the poultry, dairy, and ethanol industries drives the need for additional feed inputs. Talks are also progressing on allowing imports of non-GM soymeal for both human and livestock consumption.
However, there remains uncertainty over tariff reductions on US dairy products, including premium cheese varieties—one of Washington’s key demands. At present, India only permits the import of about 0.5 million tonnes of maize under restricted quotas, with policymakers historically cautious about opening agricultural markets to protect local farmers.
No Formal Announcement on Russian Oil Cuts Yet
While there is no official confirmation from the Indian government regarding a formal cut in Russian oil imports, Mint reported that state-run oil companies could be informally advised to diversify crude purchases toward the US and other sources. Russia currently accounts for nearly 34% of India’s crude oil imports, while the US provides around 10%.
Modi-Trump Dialogue Strengthens Bilateral Ties
US President Donald Trump told reporters that he had spoken with Indian Prime Minister Narendra Modi, discussing energy and trade as key issues. Trump said Modi assured him that India would limit its oil imports from Russia, emphasizing their shared interest in ending the ongoing conflict.
“He’s not going to buy much oil from Russia. He wants to see that war end as much as I do,” Trump said from the Oval Office. Modi confirmed the conversation on X (formerly Twitter), expressing gratitude for Trump’s Diwali greetings and highlighting the commitment of both democracies to global peace and cooperation.
India-US Trade Momentum Builds
As per India’s Commerce Ministry, bilateral trade between India and the US reached $71.41 billion in the first half of FY26, marking an 11.8% year-on-year growth. Indian exports to the US rose by about 13.4% during the same period.
Negotiators aim to finalize the India-US trade agreement by November 2025, with an official announcement expected at the upcoming ASEAN Summit. If concluded, the deal could significantly boost trade, reduce tariff barriers, and reinforce strategic cooperation between the world’s two largest democracies.