India Wins Tariff Relief as Trump Claims Russia Oil Deal

By Staff, Agencies

US President Donald Trump announced on Monday a trade deal with India after a call with Prime Minister Narendra Modi, saying New Delhi will stop buying Russian oil and pledge more than $500 billion in US goods.

However, India’s official statement tells a far narrower story, exposing the gap with Trump’s claims.

Trump said Modi agreed to stop buying Russian oil and boost US purchases, cut Indian tariffs from 25% to 18%, and promised over $500 billion in American imports.

Modi confirmed only the tariff cut, writing on Truth Social: “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.”

Notably absent from his statement was any mention of halting Russian oil imports, reducing Indian tariffs to zero, or the $500 billion purchase commitment.

An unnamed source confirmed to Bloomberg that the US has only agreed to "remove a 25% additional tariff imposed on India for buying Russian oil," describing this as the penalty that had brought total tariffs to 50%.

Earlier in the day, Indian Commerce Secretary Rajesh Agarwal told CNBC-TV18 that "a lot of the sticky issues with regards to the deal have been addressed," but provided no specifics on oil commitments.

This pattern has precedent. In October 2025, Trump claimed Modi would halt Russian oil purchases, but India denied any such agreement, citing consumer protection.

The tariff cut tackles a key threat to India’s exports. The US, India’s largest trading partner, accounted for $131.8 billion in bilateral trade in 2024‑25, with $86.5 billion in Indian exports including machinery, gems, pharmaceuticals, and engineering goods.

US tariffs in August 2025 threatened to cut India’s GDP by up to 1.3% and price engineering goods out of the market. The February 2026 deal reducing tariffs to 18% restores roughly 60–70% of India’s US competitiveness, though exporters still lag behind ASEAN nations facing lower rates.

Trump’s claim that India will cut tariffs to zero lacks confirmation, as India’s complex, politically sensitive tariff system remains intact.

India’s Russian oil imports surged from under 2% in early 2022 to 40% by November 2025, then fell to 1.2 million bpd by January 2026 amid sanctions, with further declines expected before stabilizing around 500,000–600,000 bpd.

Global suppliers—including Iraq, Saudi Arabia, the UAE, and Nigeria—have capacity to fill the gap, and India’s two-month crude inventories provide a buffer during the transition.

Trump cited Venezuela as a potential oil source despite US control, selling $500 million of crude to Vitol. Venezuelan oil, similar to Russian grades, is now being eyed by Indian refiners including HPCL, Indian Oil, and Reliance.