India and the United States are reportedly in the advanced stages of finalising a long-awaited trade agreement that could cut US tariffs on Indian goods to about 15–16%, down from the current levels of up to 50%.
According to the reports, the pact is centred on the energy and agriculture sectors, with one major condition being India’s gradual reduction of crude oil imports from Russia — aligning with Washington’s global strategy to limit dependence on Russian energy.
When asked, both India’s Ministry of Commerce & Industry and the White House declined to provide comment.
As part of the negotiations, India may allow greater imports of key US agricultural products such as non-genetically modified corn and soymeal, according to sources. The agreement may also incorporate a mechanism for periodic tariff and market-access reviews, ensuring both countries adjust to changing trade dynamics over time.
A central pillar of the deal involves India committing to gradually lower its imports of Russian crude oil. Trump recently remarked:
“Energy was also part of our discussion, and Prime Minister Modi assured me that India would limit its oil purchases from Russia.”
This aspect is seen as critical for Washington, which aims to reduce global reliance on Russian energy while strengthening ties with India.
Reducing US tariffs to the 15–16% range could substantially improve the competitiveness of Indian exports — particularly in sectors such as textiles, engineering goods and pharmaceuticals — in the U.S. market. In contrast, current U.S. duties of up to 50% act as a significant barrier for Indian exporters.
The deal is reportedly aimed to be announced during the upcoming ASEAN Summit later this month, where U.S. President Donald Trump and Indian Prime Minister Narendra Modi are expected to meet.
While the potential tariff cut offers major economic gains, India must carefully balance energy-security considerations, domestic agriculture protections, and the geopolitical dimension of reducing Russian oil imports. Observers note that shifting from Russian crude—currently accounting for roughly one-third of India’s crude imports—is complex.
If concluded, this deal would mark the most significant breakthrough in U.S.–India trade relations since talks stalled in 2020 over tariff disputes. The U.S. remains one of India’s largest export destinations, with bilateral trade exceeding $200 billion in recent years. India Today
The reported agreement between India and the U.S. to reduce American tariffs on Indian exports to the 15–16% range could herald a transformative moment in bilateral trade. By anchoring the deal to energy cooperation and agricultural market access, both countries are leveraging trade as a strategic tool.
For Indian exporters, the tariff reduction would restore competitiveness and open new opportunities in the U.S. market. For the U.S., the agreement strengthens a key alliance and addresses strategic concerns around Russian energy. Challenges remain—particularly around India’s energy sourcing from Russia, domestic sectors like agriculture and dairy, and timely implementation—but the deal sets the stage for a deeper, more balanced U.S.–India economic partnership.