The United States and India are nearing a significant trade deal that could see the current 50 percent tariff rate on Indian exports slashed to as low as 15 to 16 percent, the Mint newspaper reported, citing three people aware of the matter.
The fresh update comes after weeks of intense negotiations between the two countries and a public pressure campaign from the White House over New Delhi’s continued purchases of Russian oil.
The report suggests that a new agreement could be announced when US President Donald Trump and Indian Prime Minister Narendra Modi meet at the Association of Southeast Asian Nations (ASEAN) summit in Malaysia, which is scheduled to take place from October 26 to 28.
A quid pro quo: a Russian retreat for tariff relief
According to the report, the deal would involve a significant quid pro quo. In exchange for the massive tariff relief, India may agree to gradually reduce its imports of Russian oil.
India may also allow the US to export more non-genetically modified American corn and soymeal to the country, providing a boost to American farmers.
The issue of India’s Russian oil purchases has been the primary sticking point in the tense negotiations. The US President Donald Trump has repeatedly and publicly criticized India for the trade, which he says is helping to fund Moscow’s war in Ukraine.
On Tuesday, Trump reiterated a claim he had made last week, stating that he had spoken with Prime Minister Narendra Modi, who had assured him that India was “not going to buy much oil from Russia.”
While New Delhi has not officially confirmed any plans to curb its Russian oil imports, state-owned refiners have recently signaled cuts, and the private giant Reliance Industries Ltd., traditionally the biggest buyer of Moscow’s crude, has already begun to shift its purchases toward Middle Eastern supplies.
A breakthrough after a period of high tension
A potential deal would mark a significant de-escalation in a trade relationship that has been under severe strain.
After becoming a major importer of discounted Russian crude following the 2022 invasion of Ukraine, India has seen its Russian oil imports make up about one-third of its overall supplies, a fact that has drawn the ire of the Trump administration.
Trade negotiators from both countries made “solid progress” in their talks in Washington last week, according to an official, as they worked to find a path to a deal and an end to the tariff storm.
For now, both the Indian Commerce Ministry and the US embassy in India have declined to comment on the specifics of the ongoing negotiations.
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