India is finally actually preparing to reduce its Russian oil imports as Washington moves closer to finalizing a major trade agreement that could drop tariffs on Indian goods from 50% down to 15%–16%, according to a report by Mint on Wednesday.
This of course comes after months of tense negotiations that tied trade relief directly to New Delhi’s willingness to distance itself from Moscow’s oil exports. If sealed, the deal will be one of the biggest tariff cuts under the Trump administration, which has repeatedly pushed India to fall in line with U.S. sanctions on Russia since the invasion of Ukraine.
As part of the broader framework, India can also expand its import quota for non-genetically modified corn from the U.S., currently capped at 0.5 million tonnes a year, while maintaining a 15% import duty.
Officials are also working on a mechanism allowing both nations to revisit tariff and market access terms periodically as conditions change, according to the report.
Trump and Modi hold tense oil talks
On Tuesday, President Donald Trump told reporters aboard Air Force One that Prime Minister Narendra Modi had assured him over the phone that India would scale back its Russian oil purchases.
“He’s not going to buy much oil from Russia. He wants to see that war end as much as I do,” Trump said, adding that New Delhi would keep paying “massive” tariffs if it failed to comply.
Hours later, Modi confirmed the phone call in a post on X, saying he hoped both nations would continue to “stand united against terrorism in all its forms,” though he avoided mentioning the oil issue directly.
Trump had made similar claims about a prior conversation with Modi last week, which India’s foreign ministry later denied. Responding to questions on Thursday, a ministry spokesperson said:
“India is a significant importer of oil and gas. It has been our consistent priority to safeguard the interests of the Indian consumer in a volatile energy scenario. Our import policies are guided entirely by this objective.”
Tariffs, Russian oil, and a fragile deal
The dispute over Russian oil has been one of the biggest sticking points in the long-running trade talks between Washington and New Delhi. In August, Trump slapped an extra 25% penalty tariff on Indian exports, raising total duties to 50% as punishment for continued purchases of Russian barrels.
That move almost derailed negotiations entirely, with Indian officials insisting that any reduction in Russian imports must come with clear plans to stabilize global supply and prevent price shocks.
Earlier this year, both countries agreed to boost bilateral trade to $500 billion by 2030, but discussions broke down in February after India rejected U.S. pressure to expand access to its agriculture and dairy sectors.
Relations took another hit when Modi met with Russian President Vladimir Putin and Chinese President Xi Jinping in Beijing last month, a meeting seen by Washington as a signal that India wasn’t ready to pull away from Moscow.
Still, momentum has picked up again. Trump this week described Modi as a “great friend” and said progress on the deal was “very good.” The final version is expected to be presented to both leaders at the ASEAN summit later this month, though neither has confirmed attendance.
Mint reported that most of the framework has been finalized, with only politically sensitive areas, like agriculture and energy, awaiting final clearance. Meanwhile, India’s Ministry of Commerce and Industry, the U.S. Department of Commerce, and the U.S. Trade Representative have yet to comment.
Trade data shows that India-U.S. commerce hit a record $132.2 billion in the fiscal year ending March 2025, up more than 10% from the previous year. India’s exports rose 11.6% to $86.51 billion, while imports from the U.S. increased 8% to $45.69 billion.
Behind the numbers, the energy puzzle remains. Since 2022, India has become the second-largest buyer of Russian crude after China, importing 1.6 million barrels a day in the first half of this year, up from just 50,000 barrels per day in 2020, based on data from the U.S. Energy Information Administration.
Whether that number drops will depend on how fast the trade deal is sealed—and how much pressure Trump is ready to apply.
If you're reading this, you’re already ahead. Stay there with our newsletter.
