Trade Tensions Thaw: U.S. and India Strike Deal After Tariff Standoff Over Russian Oil
NEW DELHI/WASHINGTON, Feb 2 (Reuters) — In a significant de-escalation of recent trade tensions, former U.S. President Donald Trump announced on Monday a preliminary trade agreement with India. The deal comes after a series of punitive U.S. tariffs, which had soared to 50% on some Indian goods, primarily levied in response to India's continued purchases of Russian crude oil.
According to the announcement, New Delhi has agreed to halt imports of Russian oil and increase energy purchases from the United States and other suppliers, potentially including Venezuela. This move aligns with long-standing U.S. foreign policy goals aimed at isolating Russia economically.
The agreement follows a turbulent timeline of tariff actions that began earlier this year, rattling a strategic partnership valued at over $190 billion in bilateral trade.
Timeline of the Tariff Dispute
April 2, 2025 — The U.S. administration imposed a 26% "reciprocal tariff" on select Indian imports as part of broader global trade measures.
April 10 — Tariffs were temporarily paused for 90 days, though a baseline 10% duty on all U.S. imports remained in effect.
July 31 — President Trump announced a 25% across-the-board tariff on Indian goods, explicitly linking the penalty to India's ongoing procurement of Russian energy.
August 7 — The tariff rate was sharply increased to 50% on Indian shipments to the U.S., marking the highest such duty imposed on any major U.S. trade partner at the time. The White House cited India's "continued reliance on Russian oil" as the primary catalyst.
Analyst and Public Reaction
The announcement has drawn mixed reactions from observers and the public.
Priya Sharma, Trade Policy Analyst at the Centre for Strategic Studies in New Delhi: "This deal is a pragmatic, if uncomfortable, compromise for India. It secures relief for our exporters but forces a costly realignment of our energy supply chains, which have relied on discounted Russian crude since the Ukraine war began."
Michael Chen, Small Business Owner in Ohio: "Finally, some sense. Those tariffs were hurting my business—the cost of components from India became unsustainable. This deal should bring stability back to our supply lines and prices."
David Forsythe, Former Diplomat & Commentator (Sharper Tone): "This is pure capitulation to economic coercion. The U.S. has weaponized trade to dictate another nation's foreign policy. It sets a dangerous precedent where strategic autonomy is sacrificed at the altar of tariff threats. What's next?"
Anjali Patel, University Student in Mumbai: "I'm worried. Switching oil suppliers will likely mean higher fuel prices here. It feels like our economic decisions are being made elsewhere."
(Reporting by Aftab Ahmed and Shivangi Acharya in New Delhi; Additional reporting and analysis by Reuters bureaus)