Trump lifts 25% tariff on India over Russian oil imports after trade deal

US President Donald Trump signed an executive order late Friday night withdrawing a 25 per cent tariff previously imposed on Indian imports over New Delhi’s purchases of Russian crude oil, signalling a significant thaw in US-India trade tensions after months of contentious negotiations.

The tariff rollback comes on the heels of a broader trade agreement between the United States and India, under which reciprocal tariffs on Indian goods — which had reached as high as 50 per cent — are being reduced to 18 per cent. In return, India has agreed to lower its trade barriers on American products and curtail its purchases of Russian oil, a concession that the Trump administration tied directly to the tariff relief.

'India agreed to halt importing Russian oil'

“India has committed to halt both direct and indirect imports of oil from the Russian Federation,” according to an executive order signed by Trump. However, India has not said anything about its plan to stop importing Russian oil so far.

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The order said New Delhi has also agreed to buy US energy products and has recently committed to a framework with Washington to expand defence cooperation over the next 10 years.

In a post on social media platform Truth Social earlier this week, Trump highlighted the accord as a major step toward improving economic cooperation and linked it to his broader foreign policy objectives. He said lowering tariffs and limiting Russian oil imports “will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week!”

Indian Prime Minister Narendra Modi welcomed the tariff reduction, posting that he was “delighted” that Made-in-India products will now face lower duties in the US market, and reiterated his intent to deepen bilateral ties.

'Dramatic turnaround'

The move marks a dramatic turnaround after almost a year of escalating trade friction between the two democracies. In 2025, the Trump administration had imposed a “reciprocal” tariff of 25 per cent on Indian exports to the United States. Later that August, an additional 25 per cent penalty tariff was added specifically because of India’s continued purchases of Russian crude — a bid by Washington to pressure New Delhi amid broader sanctions on Moscow over the Ukraine war.

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Beyond trade, the deal could reshape parts of the broader bilateral relationship. India’s commitment to buying more U.S. goods, including energy and agricultural products, and lower tariffs on American exports, points to a deepening economic partnership at a time when global supply chains and geopolitical alliances are realigning.

(With Agency inputs)