US President Donald Trump has announced to reduce the 25 percent reciprocal tariff imposed on India to 18 percent. Apart from this, American officials have also said that they are also removing 25 percent Russian tariff. After which India has been included in the list of countries on which American tariff is less than 20 percent. This tariff reduction has also been welcomed by India’s PM Narendra Modi. Now it seems that trade between the two countries will be announced soon.
By the way, Donald Trump has not taken a ‘U-turn’ on tariffs just like that. Many reasons are being given behind it. The biggest reason is the American people themselves. In reality, American inflation has not decreased. Especially because of the Trump tariff program. Due to tariffs, foreign goods, especially Indian products, had become very expensive in America, which had remained a part of the American lifestyle. Because of which there was a lot of pressure on Trump from his own people.
On the other hand, US President Trump has been quite surprised by the kind of trade deal made with Europe and India. On the other hand, relations between Europe and America have also soured regarding Greenland. Because of which Trump and America were finding themselves quite isolated on the global platform. This is also a big reason. India’s growing closeness with Canada and the uranium deal in a few days are also big reasons.
Besides, supplying Venezuelan crude oil to India is also a big reason. So that the supply of Russian crude oil in India can be completely reduced. In fact, the US President had recently talked about supplying Venezuelan oil to India. So that India’s demand can be met after stopping Russian oil supply. Apart from this, raising India as an alternative to China is also an important goal of Trump.
Recently, India-Russian export figures have surprised not only America but the entire world. Which has crossed one trillion dollars. In such a situation, to make India a part of the global supply chain and expand it, not only Europe but also American support is very important. This is the reason why US President Trump has reduced the tariff on India. Let us try to understand all these things in detail.
Trade deal with EU
India and EU trade deal which is also called ‘Mother of all deals’. The biggest reason for reducing American tariffs is being considered. According to experts, this deal has created a market of 200 crore people. Which is bigger than any big deal in the world. After this deal, India has given place to many European products in India with low tariff and zero tariff.
Besides, Europe has also reduced the tariffs on most of the Indian products. Now the trade deal between India and EU is opening the way for exports worth about Rs 6.4 lakh crore to different states of the country. This means that this trade deal will not only compensate India for its loss due to American tariffs, but will also benefit the country.
When America imposed 50 percent tariff on India, it was estimated that India would suffer a huge loss and it also suffered a loss. If we look at the figures, when the current financial year started, India’s exports were worth $8.4 billion in April, which came down to $6.88 billion in the month of December. The figures for January have not been released yet.
Uranium deal may be done with Canada soon
The closeness between India and Canada is also increasing. That too at a time when US President Donald Trump has talked about imposing heavy tariffs on Canada. Now Canadian President Mark Carney has also turned towards India. Recently there were reports that Mark Carney may visit India in the month of March. After which talks between the two countries can start on the stalled trade deal from November 2025. The special thing is that during Mark Carney’s visit, Canada can also make a uranium deal worth Rs 25 thousand crore with India. Apart from artificial intelligence and crude oil supply, many other products can also be discussed.
On the other hand, India has started negotiating trade deals with many countries of South America. Along with this, oil supply has also been started. Due to which the anxiety of the American President is increasing further. Experts believe that India is making trade deals with all those countries. So that India’s exports benefit and at the same time India never faces any problem regarding oil supply.
Inflation attack in America
The important reason for reducing the tariff on India is the lack of inflation in America. According to the report of foreign media house, American inflation remained stable at 2.7 percent in December, which shows that even though efforts are being made to control the rise in prices, it still remains above the tolerance level of the Federal Reserve.
The annual consumer price index data remained unchanged from November. Excluding volatile food and energy prices, core inflation stood at 2.6 percent, slightly below expectations of 2.7 percent. There was a jump of 3.2 percent in housing related prices. Whereas food inflation has been seen at 3.1 percent. Due to inflation exceeding the tolerance level, it has become difficult to reduce interest rates in America.
Fed Reserve Chief Jerome Powell, while pressing the pause button on rate cut after the recent policy meeting, has indicated that due to the current inflation, the common people may have to wait for a long time for the rate cut. However, his tenure is ending in May and he can be replaced by Kevin Warsh, who is very sensitive about inflation. His stance regarding monetary policy has been quite strict. In such a situation, if inflation does not reduce in the future, then the dream of rate cut, which Trump has been dreaming of since returning to power, may be shattered.
Global war against Chinese exports
Trade war between America and China is nothing new. Recently China released its export figures. Seeing this, not only America but the whole world is shocked. According to the report, Chinese exports have crossed the 1 trillion dollar mark in the year 2025. That too at a time when America has imposed very high tariffs on Chinese exports. Even after that, China has increased its tariffs in many countries of the world.
To reduce China’s share in Chinese exports and global supply chain, America needs a country that has the power to replace the dragon. In such a situation, India is the only name which has emerged during the Covid period. For this, it is very important to have access to Indian products and support from big global countries.
The recent trade deal with Europe can play an important role in this. But the American deal is also very important on this front. Even Trump himself understands this. American company Apple has put the importance of India in front of the whole world. Because of which Trump has helped in increasing the strength of the South Asian country in the global supply chain by removing tariffs on India.
Venezuelan oil sales
On the other hand, America has taken control of Venezuelan crude oil. Since then the responsibility of selling it has also increased. Trump had said that the money from this oil would be spent on the welfare and growth of the Venezuelan and American people. But the biggest question was who would buy it? In such a situation, Trump has offered to sell it to India. Trump also pointed this out recently.
In fact, America wants India to switch from Russian oil to Venezuelan oil to meet its needs. On which a consensus seems to be emerging between the two countries. According to Reuters, a White House official said that Washington is ready to remove the additional 25 percent tariff imposed on New Delhi on Russian oil.
According to the news agency, the official said that in view of India’s agreement to stop purchasing Russian oil, we are removing 25 percent tariff. In such a situation, India can take the supply of Russian oil from completely stopped Venezuelan oil.
Trump had announced
President Donald Trump on Monday announced after a phone conversation with Prime Minister Modi that the United States has reduced the reciprocal tariff on imports from India from 25 percent to 18 percent. He further said that India will also move towards reducing its tariff and non-tariff barriers on American goods to zero, possibly as part of the much-awaited trade agreement between the two global powers.
Prime Minister Modi welcomed the duty cut and called it a big incentive for Indian industry and exporters. He wrote that it was great to talk to his dear friend President Trump today. He further said that now there will be 18 percent less duty on ‘Made in India’ products. Modi thanked Trump “on behalf of the 140 crore people of India for this wonderful announcement”.
Russian oil tariff will also be removed
Speaking on this particular issue, Trump said that in a recent phone call, India has agreed to stop purchasing Russian oil and instead increase purchases of oil from the United States and possibly Venezuela. Trump further wrote in the post that we talked about many issues including trade and ending the war with Russia and Ukraine. It has agreed to stop buying Russian oil and buy more oil from the United States and possibly Venezuela. This will help end the ongoing war in Ukraine, which is killing thousands of people every week!
Meanwhile, according to Reuters, a White House official said that Washington is ready to remove the additional 25 percent tariff imposed on New Delhi on Russian oil. According to the news agency, the official said that in view of India’s agreement to stop purchasing Russian oil, we are also removing 25 percent tariff.
50 percent tariff was imposed
Indian clothing, footwear, textiles, engineering goods and other consumer-oriented manufacturing sectors were hit the hardest by the 50 per cent tariff imposed by the US, forcing exporters to bear huge cost increases and offer heavy discounts to retain US buyers.
Despite this shock, India’s exports have been better than expected, according to the Economic Survey 2026. The survey noted strong domestic fundamentals and policy reforms, which helped mitigate the impact of rising US tariffs. The survey said that several structural reforms and policy measures have led to the acceleration of growth, and also said that India’s external position remains strong in the near term.