India and the US are near a commerce take care of vital tariff cuts and decreasing Russian oil purchases

U.S. President Donald Trump meets with Indian Prime Minister Narendra Modi in the Oval Office of the White House in Washington, DC on February 13, 2025

Jim Watson | Afp | Getty Images

The US could significantly cut tariffs on Indian exports as the two countries move closer to a trade deal that could lead to New Delhi cutting oil purchases from Russia, Indian media outlet Mint reported on Wednesday.

Under the trade deal, Washington could cut tariffs on Indian exports to 15-16% from the current 50%, Mint reported, citing three unnamed sources familiar with the matter.

India is also considering increasing its import quota of non-GMO corn from the US – currently 0.5 million tonnes per year – even with a 15% import duty, while pushing for a mechanism for both sides to review tariffs and market access over time, the report said.

On Tuesday, US President Donald Trump said he had received assurances from Indian Prime Minister Narendra Modi in a phone call that New Delhi would reduce purchases of Russian oil.

“He’s not going to buy a lot of oil from Russia. He wants this war to end the same way I do. He wants the war to end with Russia and Ukraine, and as you know, they’re not going to buy too much oil,” Trump told reporters abroad on Air Force One, threatening that New Delhi would continue to pay “massive” tariffs if it didn’t.

In a post on Wednesday morning local time

Trump also said last week that Modi had agreed in a call to cut Russian oil purchases. The Indian Foreign Ministry spokesman said the following day that he was unaware of a phone call between Trump and Modi.

On the issue of cutting oil imports from Russia, the spokesperson said on Thursday: “India is a major importer of oil and gas. It has been our consistent priority to protect the interests of the Indian consumer in a volatile energy scenario. Our import policy is entirely guided by this objective.”

Strategic focal point

US-India relations deteriorated further when Modi met Russian President Vladimir Putin and Chinese President Xi Jinping in Beijing last month. This move was seen as a signal to Trump that India is ready to strengthen ties with Moscow rather than sever them.

According to the US Energy Information Administration, since the war in Ukraine began in 2022, India has become the world’s second-largest buyer of Russian crude oil, trailing only China. In the first half of this year, the country imported 1.6 million barrels per day, up from 50,000 bpd in 2020.

In recent weeks, Trump has toned down his rhetoric, expressed optimism about the ongoing negotiations and reiterated on Tuesday that Modi is a “great friend.”

The conclusion of the trade deal will likely be communicated to Trump and Modi at the ASEAN summit later this month, although neither Trump nor Modi have officially confirmed their attendance at the event, Mint reported.

“The broad outlines of the agreement are in place, but sensitive areas such as agriculture and energy require political approval before the agreement can be announced,” the report said.

India’s Ministry of Commerce and Industry, the U.S. Department of Commerce and the U.S. Trade Representative did not immediately respond to CNBC’s requests for comment.

Data from the state-backed India Brand Equity Foundation shows bilateral trade between New Delhi and Washington hit a record $132.2 billion in the fiscal year ended March 2025, up more than 10% from a year ago.

India’s exports to the US rose 11.6% to $86.51 billion, while imports from the country rose 8% to $45.69 billion.

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