New Delhi: India and the USA are reportedly on the verge of finalising a landmark commerce deal that would slash US tariffs on Indian exports. At current, the USA imposes round 50% tariffs on a number of Indian merchandise. If the settlement comes via, that fee might drop to 15-16%, providing a serious enhance to exporters and the financial system.. Lengthy delayed, the pact is now gaining traction as discussions round vitality cooperation and agricultural entry advance quickly.
Will White Home punitive tariffs vanish? Talking at a Kolkata occasion hosted by the India Chamber of Commerce, Chief Financial Advisor V. Anantha Nageswaran expressed confidence within the final result. “Whereas I don’t have a magic wand or inside entry, I personally imagine that within the subsequent few months, or maybe sooner, we’ll see decision of the extra 25% punitive tariffs,” he stated.
These duties have precipitated challenges for Indian exporters.
Nageswaran added that negotiations on reciprocal tariffs are ongoing. “It’s potential that these 25% reciprocal tariffs might also scale back to the anticipated 15–16% degree,” he stated. If that occurs, it is going to be a second of great celebration for India’s commerce sector.
In monetary 12 months 2024-25, India exported $86.51 billion to the USA – its largest market. Nageswaran stated that tariffs had restricted affect this 12 months since India had already captured half the amount.
Nevertheless, sustaining the 50% fee might have slashed exports by 30% subsequent 12 months, a extreme blow for an financial system the place exports contribute roughly 1 / 4 of GDP. The commerce deal might forestall this setback.
Vitality Ties Underpin the Deal
Vitality technique is a central pillar of the proposed settlement. Stories recommend that India might step by step minimize crude imports from Russia as a part of broader financial cooperation with Washington. Russian oil purchases had triggered the sooner 25% punitive tariff. Presently, India imports about 34% of its crude oil from Russia, whereas roughly 10% comes from the USA.
India might permit ethanol imports and scale back Russian crude purchases. In return, vitality commerce concessions from the USA are probably. Authorities oil corporations might diversify sourcing with US crude. Latest stories present the worth hole between discounted Russian crude and benchmark oil has narrowed from $23 per barrel in 2023 to simply $2–2.50, making Center Japanese and US crude extra aggressive.
The commerce pact additionally touches on agriculture. India might enhance entry for US non-GMO corn and soymeal. US exporters face shrinking markets, particularly after China lowered its corn imports drastically (from $5.2 billion in 2022 to $331 million in 2024). India might change into a serious purchaser for American agricultural merchandise.
Throughout a latest telephone dialog between US President Donald Trump and Prime Minister Narendra Modi, vitality dominated the agenda. The US president later claimed that PM Modi had assured him that India would restrict its oil purchases from Russia.
PM Modi acknowledged the decision, highlighting the “constructive engagement” however didn’t present extra particulars. He took to X (previously Twitter) to specific appreciation for the outreach from Washington.
“Thanks, President Trump, in your telephone name and heat Diwali greetings. On this competition of lights, might our two nice democracies proceed to light up the world with hope and stand united in opposition to terrorism in all its kinds,” the prime minister posted.
Thanks, President Trump, in your telephone name and heat Diwali greetings. On this competition of lights, might our two nice democracies proceed to light up the world with hope and stand united in opposition to terrorism in all its kinds.@realDonaldTrump @POTUS
— Narendra Modi (@narendramodi) October 22, 2025
Attainable Announcement At ASEAN Summit
The commerce deal might embrace mechanisms for periodic evaluate of tariffs and market entry, permitting India and the USA to regulate phrases over time.
Officers from the Ministry of Commerce and the White Home haven’t formally commented, however stories point out a proper announcement might coincide with the ASEAN Summit later this month.
Nevertheless, Prime Minister Narendra Modi is unlikely to journey to Malaysia to take part within the conferences associated to the ASEAN summit starting Sunday resulting from scheduling points, folks conversant in the matter advised PTI on Wednesday.
If finalised, this settlement might mark one of the important shifts in India-US commerce relations in years, reshaping tariffs, boosting agricultural exchanges and signalling a brand new section in strategic vitality alignment.