Trump cuts India tariffs to 18% in trade deal tied to Russian oil

The White House has announced a trade agreement slashing tariffs on Indian imports from 50% to 18%, with President Donald Trump citing pledges from New Delhi to end Russian oil purchases and spend over $500 billion on U.S. goods.

Driving the news: Trump announced the deal after a Monday call with Prime Minister Narendra Modi, whom he called “one of my greatest friends.” The deal, which was reached one week after India’s EU trade pact, drops last August’s 25% punitive levy and lowers the reciprocal rate, bringing the total from 50% to 18%.

Those earlier tariffs, imposed after talks collapsed, were projected to cost 2 million Indian jobs. Modi, in response, welcomed lower tariffs on social media but avoided Trump’s claim about halting Russian oil. Meanwhile, Indian officials said the $500 billion purchase pledge spans five years.

What this means: The tariff cut would help Asian American businesses hit by price increases since last year. Indian American entrepreneurs in jewelry and textiles, where 50% tariffs were projected to cut shipments 70%, stand to recover competitiveness. The deal also benefits businesses in leather, plastics, ceramics and auto components, with lower tariffs expected to help Indian exporters integrate more deeply into U.S. supply chains. The pharmaceutical industry, which supplies half of U.S. generic drugs and $8.7 billion in American sales, received exemptions from steeper tariffs.

A joint statement detailing the full agreement is expected soon, according to India’s Trade Ministry.