A phone call between two leaders, announced first in a social media post, has reset the price of Indian goods in American markets: a levy that stood at 50 per cent is to fall to 18. Behind the number sit older frictions, a penalty tied to Russian oil and a wider contest over who trades with whom, and each side has told the story in its own voice. The formal terms are not yet on paper, so the arrangement exists so far as a promise made in public, and whether it holds will depend on documents and barrels of oil yet to appear.
Trump Cuts Tariffs on Indian Goods to 18%, Ending Russian Oil Levy Under New Trade Deal
The oil penalty is gone, which is how the total falls so far.
Mark
So what actually changed for Indian exporters?
Mimi
The total US tariff on Indian goods went from 50 per cent to 18 per cent, according to Trump. That's the 25 per cent reciprocal rate falling to 18, plus the 25 per cent Russian oil penalty being removed.
Mark
Why was there an oil penalty at all?
Mimi
It was an extra duty imposed because India was buying Russian crude. Trump now says Modi agreed to stop.
Luke
And that's worth flagging: the oil commitment comes from Trump's post. Modi's message only mentions the lower tariff on Made in India products.
Mark
So India hasn't confirmed it will stop buying Russian oil?
Luke
Not in what's been quoted here. It may come out later, but today it's one side's description.
Mimi
The same goes for the promise to buy more American goods and possibly Venezuelan oil. Those are Trump's words.
Mark
Where does 18 per cent leave India compared with others?
Mimi
Just under Malaysia, Thailand, Cambodia and Pakistan at 19, and well below China at 37 or Brazil at 50. But above the EU, Japan and South Korea at 15, and the UK at 10.
Luke
What we don't have is the formal text, so we can't say how binding any of this is or what the timeline looks like.
Il Polso
- Trump's post announced the cut from 50 to 18 per cent with the words 'took effect immediately', leaving markets and exporters to scramble for the text behind it.
- A 25 per cent Russia-oil penalty duty is being removed, and that single line item accounts for much of the drop in the total levy.
- Modi hailed the deal as good news for 'Made in India' goods, while the pledges on Russian crude and American purchases appear only in Trump's account.
- India now sits just below a 19 per cent cluster of Malaysia, Thailand, Cambodia and Pakistan, while the question of compliance on Russian oil remains open.
A phone call between two leaders, announced first in a social media post, has reset the price of Indian goods in American markets: a levy that stood at 50 per cent is to fall to 18. Behind the number sit older frictions, a penalty tied to Russian oil and a wider contest over who trades with whom, and each side has told the story in its own voice. The formal terms are not yet on paper, so the arrangement exists so far as a promise made in public, and whether it holds will depend on documents and barrels of oil yet to appear.
The announcement came first on Truth Social. After a phone call with Prime Minister Narendra Modi, President Donald Trump declared that the United States and India had agreed to a trade deal, with tariffs on Indian goods falling from 50 per cent to 18 per cent.
The old figure had been built from two parts: a 25 per cent reciprocal tariff, and an additional 25 per cent duty imposed because India was buying Russian crude. Under the arrangement as Trump described it, the reciprocal rate drops to 18 per cent and the oil penalty disappears, which accounts for the steep fall.
Trump's post framed the call as covering much more than trade, including ending the war between Russia and Ukraine. In his account, Modi agreed to stop buying Russian oil and to purchase far more from the United States and possibly Venezuela. Modi responded warmly on X, calling Trump a dear friend and thanking him on behalf of 1.4 billion people, but his message focused on relief for Made in India products and did not repeat the oil commitments.
At 18 per cent, India moves into a middle band of US tariff rates, just below a cluster at 19 per cent and well above the European Union and Japan at 15 per cent. What remains unclear is the detail: no formal text has been published. Observers will be watching whether those terms appear, and whether India's Russian oil purchases truly change as described.
The announcement came first on Truth Social. After a phone call with Prime Minister Narendra Modi, US President Donald Trump said the United States and India had agreed to a trade deal, and that tariffs on Indian goods would fall from 50 per cent to 18 per cent.
The old 50 per cent figure was built from two pieces: a 25 per cent reciprocal tariff, and a further 25 per cent duty added because India was importing Russian crude oil. Under the arrangement as Trump described it, the reciprocal rate drops from 25 to 18 per cent, and the oil penalty is gone, which is how the total falls so far.
Trump's post framed the call as covering more than trade. He wrote that he and Modi spoke about many things, including ending the war between Russia and Ukraine. In his telling, Modi agreed to stop buying Russian oil and to buy much more from the United States and, potentially, Venezuela. He said the deal took effect immediately, and presented it as a gesture of friendship and respect for Modi, made at Modi's request.
Modi responded on X. He called Trump a dear friend and said he was delighted that Made in India products would now face an 18 per cent tariff. He thanked Trump on behalf of the 1.4 billion people of India, describing the announcement as wonderful. Notably, his public message spoke about the tariff relief for Indian-made goods; the commitments on Russian oil and American purchases appear in Trump's account.
The new rate puts India in a different position relative to other countries facing US duties. Brazil sits at 50 per cent. Myanmar, Laos and Syria are at 40 per cent. China is at 37 per cent and South Africa at 30 per cent. Canada and Mexico face 25 per cent, while Bangladesh and Vietnam are at 20 per cent.
At 18 per cent, India is just below a cluster at 19 per cent that includes Malaysia, Cambodia, Thailand and Pakistan. Above the lower tier are the European Union, Japan, South Korea and Switzerland, all at 15 per cent. The United Kingdom has the lowest rate on the list, at 10 per cent.
What remains unclear is the detail. The public record so far consists of Trump's social media post and Modi's reply, with no published text setting out the formal terms. Two things to watch are whether those terms are released, and whether India's Russian oil purchases actually change in the way Trump described.
Citazioni salienti
He agreed to stop buying Russian oil, and to buy much more from the United States and, potentially, Venezuela.— Donald Trump, on Truth Social
Delighted that Made in India products will now have a reduced tariff of 18 per cent.— Narendra Modi, on X
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Politics & Governance