Trump Announces India–US Trade Deal, Cuts Tariffs to 18% and Links Agreement to Ending Russian Oil Purchases
U.S. President Donald Trump announced on Monday that the United States and India had finalised a trade deal that lowers U.S. reciprocal tariffs on Indian goods to 18%, linking the agreement to India’s future energy purchases and its role in global efforts to end the war in Ukraine, following a telephone conversation with Indian Prime Minister Narendra Modi.
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| POTUS Trump with PM Modi, file photo; Via US Ambassador to India |
Trump said the two leaders discussed trade and “ending the War with Russia and Ukraine,” adding that Modi had “agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela.” Trump said this shift “will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week.”
Trump said that “out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India,” under which Washington would lower its reciprocal tariff on Indian exports from 25% to 18%.
He added that India would “move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO,” and said Modi had committed to “BUY AMERICAN, at a much higher level,” including purchases of “over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products.” Trump concluded by saying, “Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most.”
Prime Minister Modi confirmed the agreement in a post on X, saying, “Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%.”
He thanked Trump “on behalf of the 1.4 billion people of India for this wonderful announcement” and said that “when two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”
Modi described Trump’s leadership as “vital for global peace, stability, and prosperity,” adding, “India fully supports his efforts for peace,” and said he looked forward to working with Trump “to take our partnership to unprecedented heights.”
"It was an Honor to speak with Prime Minister Modi, of India, this morning... He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine" - President Donald J. Trump 🇺🇸 pic.twitter.com/RD7PZ8S16z
— The White House (@WhiteHouse) February 2, 2026
The announcement followed months of negotiations between the two countries, during which the Trump administration imposed steep tariffs of up to 50% on Indian exports to the United States. Of that, 25% was linked by Washington to India’s continued purchases of Russian crude oil, which U.S. officials said indirectly financed Russia’s war in Ukraine. Trump said on Monday that the new 18% tariff rate would take effect immediately.
Earlier, U.S. Ambassador to India Sergio Gor had posted on X that Trump had spoken with Modi and urged audiences to “STAY TUNED,” ahead of the formal announcement. Trump later expanded on the deal while speaking to reporters aboard Air Force One, saying, “We’ve already made that deal, the concept of the deal,” and reiterating that India would begin sourcing oil from Venezuela as part of efforts to substitute Russian supplies. Trump had said over the weekend that India would start purchasing Venezuelan crude, a claim he linked to his broader strategy to cut Russia’s energy revenues.
India is the world’s third-largest importer of crude oil. It halted oil imports from Venezuela last year after the Trump administration imposed a 25% tariff in March on countries purchasing Venezuelan crude. Trump also indicated that India would source Venezuelan oil in place of Iranian supplies, though India had already stopped importing Iranian crude in 2019 following U.S. sanctions related to Tehran’s nuclear programme.
Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.
— Narendra Modi (@narendramodi) February 2, 2026
When two large economies and the…
After cutting Iranian imports, Indian refiners initially increased purchases from the United States, before later emerging as the largest buyer of discounted Russian seaborne crude following Western sanctions on Moscow after its 2022 invasion of Ukraine.
Senior U.S. officials have framed the latest trade agreement as evidence that tariff pressure has reshaped India’s energy decisions. U.S. Treasury Secretary Scott Bessent said earlier this year that the 25% tariff imposed on India over Russian oil purchases had delivered results. Speaking at the World Economic Forum in Davos, Bessent said, “We put 25% tariffs on India for buying Russian oil, and the Indian purchases by their refineries of Russian oil have collapsed. So that is a success.”
He added that while the tariffs were still in place at the time, “I would imagine there is a path to take them off,” calling the outcome “a check and a huge success.”
As I have said many times, President Trump genuinely considers Prime Minister Modi a great friend! Thrilled by the news of the trade deal this evening. The relationship between the United States and India has LIMITLESS POTENTIAL!
— Ambassador Sergio Gor (@USAmbIndia) February 2, 2026
The India–U.S. trade deal comes days after India and the European Union announced what both sides described as the “mother of all” trade agreements. While the EU is India’s largest trading partner as an economic bloc, the United States remains India’s single largest trading partner.
Trump’s announcement showed Washington’s expectation that India’s closer economic alignment with the U.S. would be accompanied by reduced reliance on Russian energy and greater access for American goods, with Trump repeatedly presenting the agreement as a direct outcome of U.S. pressure and presidential intervention.