The White House has confirmed the removal of a 25 per cent additional tariff on Indian imports, previously imposed over New Delhi's purchases of Russian oil.

This development follows a freshly announced India-US trade deal, under which the United States has reduced its overall tariffs on India to 18 per cent. A senior White House official clarified to ANI that the tariff relief hinges on India completely ceasing its Russian oil acquisitions, rather than merely scaling them back.

Speaking to reporters on Monday local time in Washington DC, the official underscored the condition explicitly. When pressed on whether the tariff lift directly trades for reduced Russian oil buys, the response was affirmative, with emphasis on a full cessation. This aligns with broader US efforts to isolate Russia's energy exports amid the ongoing Ukraine conflict.

US President Donald Trump heralded the agreement earlier on Truth Social, framing it as a personal triumph born of his friendship with Indian Prime Minister Narendra Modi. Trump described Modi as one of his closest allies and a formidable leader, recounting a morning phone call that covered trade, the Russia-Ukraine war, and energy shifts. He claimed Modi had pledged to halt Russian oil purchases entirely and ramp up imports from the United States, with potential sourcing from Venezuela.

Trump detailed the tariff adjustment as a reciprocal gesture, slashing the rate from 25 per cent to 18 per cent effective immediately, out of respect for Modi. In return, India would lower its own tariffs and non-tariff barriers on US goods to zero. The President highlighted Modi's commitment to "Buy American" at elevated levels, encompassing over $500 billion in US energy, technology, agriculture, coal, and other products.

The deal, Trump asserted, would bolster the already strong India-US relationship and contribute to ending the Ukraine war by curbing Russia's oil revenues. He portrayed both leaders as decisive actors who "get things done," contrasting them with less effective counterparts. This narrative positions the trade pact as a geopolitical lever, intertwining economic incentives with global security aims.

Prime Minister Modi responded promptly on X, expressing delight at the conversation with his "dear friend" Trump. He welcomed the reduced 18 per cent tariff on Made in India products, thanking the US President on behalf of India's 1.4 billion citizens. Modi's post emphasised the mutual benefits of collaboration between the world's largest democracies and major economies.

Modi further praised Trump's leadership as essential for global peace, stability, and prosperity, affirming India's support for his peace initiatives. He expressed eagerness to elevate the bilateral partnership to new heights through close cooperation. This exchange underscores the personal rapport between the leaders, which has driven several high-stakes deals in recent years.

For India, the tariff relief arrives at a critical juncture. New Delhi has significantly increased Russian oil imports since 2022, capitalising on discounted prices to shield its economy from global energy shocks. These purchases, often refined and re-exported, have drawn Western scrutiny, with the US previously wielding secondary sanctions and tariff threats as deterrents.

The agreement mandates a complete halt, potentially reshaping India's energy strategy. While challenging given Russia's role as a key supplier—accounting for nearly 40 per cent of India's oil needs in late 2025—this shift could pivot imports toward US liquefied natural gas (LNG), crude, and renewables. Analysts note it may stabilise bilateral trade, currently valued at over $190 billion annually, amid Trump's protectionist agenda.

Geopolitically, the move signals India's tighter alignment with Washington against Russian influence. It echoes prior US-India pacts like iCET and COMCASA, enhancing defence and tech ties. However, ceasing Russian oil could elevate India's import costs by 15-20 per cent short-term, prompting diversification into Middle Eastern, African, and Latin American sources.

Trump's invocation of Venezuela adds intrigue, hinting at US efforts to redirect sanctioned Venezuelan oil flows. For the US, the deal counters China's dominance in global energy markets and bolsters domestic producers facing soft prices. It also advances Trump's campaign promise to wield trade policy as a foreign policy tool.

India's defence and aerospace sectors stand to gain indirectly. Lower US tariffs could ease access to American components for indigenous programmes like Tejas fighters, BrahMos missiles, and Gaganyaan. With firms such as HAL, BEL, and Tata Advanced Systems reliant on US tech, this fosters "Make in India" while deepening QUAD synergies against shared threats.

Critics in India may decry the oil cessation as capitulation, risking energy security amid volatile prices. Yet Modi's swift endorsement suggests strategic calculus: tariff cuts unlock $20-30 billion in annual export gains for pharmaceuticals, textiles, gems, and IT services. This balances economic pragmatism with alliance-building.

The White House confirmation quells speculation post-Trump's post, affirming the deal's enforceability. Implementation details remain pending, including timelines for oil cessation and barrier reductions. Monitoring mechanisms, possibly via joint task forces, could ensure compliance.

Broader implications ripple through South Asia. Pakistan, reliant on discounted Russian energy reroutes, faces tighter supplies. China, India's top trade partner, watches warily as US-India convergence accelerates de-risking from Beijing-dominated supply chains.

As of 3 February 2026, markets reacted positively: the Sensex climbed 1.2 per cent, rupee strengthened versus the dollar, and US-India ETF volumes surged. Energy stocks like Reliance and ONGC dipped initially on oil pivot fears but recovered on diversification prospects.

This pact exemplifies Trump-Modi diplomacy: bold, personal, and transactional. It fortifies economic pillars of the US-India strategic partnership, poised to influence Indo-Pacific dynamics for years ahead.

Agencies