The trade deal announced by US President Donald J. Trump following his conversation with Prime Minister Narendra Modi provides clarity only on the reduction of the US reciprocal tariff, while leaving unanswered questions around the previously imposed 25% tariff penalty linked to India’s purchase of Russian oil.
In his statement, Trump said that he had agreed to a trade deal with India under which the United States would reduce its reciprocal tariff from 25% to 18% with immediate effect. The President did not make any reference to the status of the separate 25% tariff penalty that had been linked to India’s continued buying of Russian oil.
Trump said the two leaders discussed several issues, including trade and efforts to end the war between Russia and Ukraine. According to the statement, Prime Minister Modi agreed to stop buying Russian oil and increase purchases from the United States and potentially Venezuela.
While the President highlighted this commitment as a step towards ending the war in Ukraine, the statement did not clarify whether the earlier tariff penalty related to Russian oil purchases has been withdrawn, modified, or remains in place.
Trump also said that Prime Minister Modi committed to “buy American” at a higher level, including purchases across US energy, technology, agricultural products, coal and other goods. However, beyond the reduction in the reciprocal tariff to 18%, no additional tariff changes or enforcement measures were detailed in the statement.
Further details on the scope and implementation of the trade deal are awaited.
