India Strikes New Trade Deal With US, Details Unclear

India signed a major trade deal and committed to halt their purchases of Russian oil after talks with the United States, lowering their tariff rate.

India, which had previously been facing tariffs of over 50%, initially attempted to circumvent the US from an economic standpoint, striking deals with countries like New Zealand and the UK, in addition to confirming a massive free trade agreement with the European Union.

In mid-2025, they held several rounds of talks with the US in attempts to establish a new trade deal, but certain roadblocks – particularly the issue of market access to India's agricultural sector – prevented them from finalizing a deal. Many Indian farmers became worried over the fact that cheaper US imports could dominate their industry, breaking down the deal.

Additionally, Trump began imposing a staggering 50% tariff on Indian exports due to their purchases of Russian oil. However, those concerns were brought down slightly after a new trade deal was signed– though the exact details of the deal are unclear.

According to Trump, the agreement will see India commit to stop buying Russian oil, shifting to American and possibly Venezuelan oil, in addition to investments of over $500 billion in the American economy. These investments will include various industries, including energy, transportation, and agriculture.

India will also reduce their tariff on the United States to zero, allowing all American goods into their country with no tariff.

However, all of these facts were omitted by Modi, who simply pointed out that India would receive a tariff reduction from the United States. This has raised concerns over the actual details of the deal, and Russia has created further uncertainty by claiming that they have not received any sort of communication regarding India's purchases of their oil. Experts are also doubtful that India will halt imports of Russian oil, given their previous stances on neutrality, geopolitics, and a consistent need for cheaper oil.

Additionally, Trump confirmed that he will remove the 25% levy for buying Russian oil and reduce India's reciprocal tariff by a further 7%, bringing the total down from 50% to 18%. This is the only portion of the deal that has been confirmed by both sides.

Both leaders released statements regarding the agreement, with Indian Prime Minister Narendra Modi praising the deal: "When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation." Nevertheless, Trump's statement differed greatly from Modi's, creating huge amounts of uncertainty over the true nature of the deal.

Many Indian experts feel that the agreement is looking much stronger for Americans and could be a detriment to the Indian economy, while others remain puzzled over the details of the deal. The deal is expected to be signed in the coming days, though, which could see the release of more information.

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