Business Desk: US-India Trade: Tariffs Poised for Sharp Drop?
Rising Tensions Over Oil and Tariffs
Recent months have seen friction between India and the US, mainly due to India’s oil purchases from Russia amid global sanctions.
President Trump responded with a 25% reciprocal tariff in April 2025, followed by another 25% penalty in August. This brought total duties on Indian exports to 50%, hitting sectors like textiles and auto parts hard.
Exports Take a Hit
India’s shipments to the US dropped 20.3% in September 2025 alone, totaling $5.5 billion, as the full impact of these tariffs kicked in.
Overall, bilateral trade suffered a 37.5% decline over four months, according to economic think tanks. Businesses on both sides have felt the strain, prompting urgent calls for resolution.
Breakthrough in Negotiations
Talks between the two nations, ongoing for years, now appear close to fruition with a potential deal by late November 2025. Sources indicate the US could lower tariffs on Indian goods to 15-16%, a major relief for exporters.
This shift follows high-level discussions, including a recent call between Trump and Modi.
India’s Concessions on Energy
To seal the agreement, India may commit to scaling back Russian crude imports, which currently make up about 34% of its total.
The US has pressed for this to curb Moscow’s revenue streams. Analysts expect a gradual reduction, balancing energy needs with diplomatic gains.
Agricultural Trade Opportunities
With China cutting back on US corn buys amid its own disputes, Washington eyes India as an alternative market. The deal might open doors for non-GMO corn and soymeal imports into India. This could help US farmers while addressing India’s feed demands for livestock.
Broader Implications
A finalized pact could stabilize ties strained by tariffs and energy politics, boosting mutual trade volumes.
Experts caution that implementation details matter, with potential start dates post-November 30. Both sides stand to gain from diversified markets and reduced dependencies.
- Lower tariffs could revive Indian export growth.
- Energy shifts may reshape global oil flows.
- Agri imports signal deeper economic integration.