India and the US are nearing a long-stalled trade deal that would reduce American tariffs on Indian imports to 15 per cent to 16 per cent from 50 per cent, Mint reported, citing three people aware of the matter.
The agreement, which hinges on energy and agriculture, may see India gradually scale back its imports of Russian crude oil, the report added.
US President Donald Trump said he spoke with Prime Minister Narendra Modi on Tuesday. The discussion largely focused on trade, he said. Trump said energy was also part of their discussion, saying Modi assured him that India would limit its oil purchases from Russia.
India’s oil purchases from Russia had prompted a punitive levy of 25 pe cent on Indian exports, which is more than and above the 25 per cent reciprocal tariffs announced in April.
At present, Russia supplies roughly 34 per cent of India’s crude oil imports, while around 10 per cent of the country’s oil and gas requirements (by value) come from the United States.
India may also open its markets further to non-genetically modified (non-GM) American corn and soymeal. In addition, New Delhi is advocating for a provision in the agreement that would allow periodic reviews of tariffs and market access, the Mint report claimed.
Finalisation of a bilateral trade agreement is likely to be announced at the ASEAN Summit during a meeting between Donald Trump and Narendra Modi this month, the report further said.
India is considering raising the quota for importing non-GM maize from the US while keeping the 15 per cent duty unchanged. The current limit is 0.5 million tonnes annually, the report said. New Delhi may also allow more American corn to meet growing domestic demand from the poultry feed, dairy, and ethanol sectors.
“Talks are also advancing on permitting imports of non-GM soymeal for both human and livestock consumption. However, there is still no final clarity on tariff reductions for dairy products, including high-end cheese, even though it is a key demand from the US team,” said one of the officials.
On energy, India may gradually reduce its reliance on Russian oil while allowing ethanol imports from the US. Washington, in turn, is expected to offer concessions on energy trade. Indian state-run oil firms may be informally guided to diversify crude sourcing toward the US.
Officials have conveyed to Moscow that India will scale down Russian crude imports, though the US has yet to match the discounts offered by Russia. President Trump has reportedly made curbing Russian oil imports a precondition for the trade pact.
Trump claims India will ease Russian oil buys
Donald Trump on Tuesday reiterated claims that New Delhi would ease its purchases of Russian energy.
“I just spoke to your prime minister today. We had a great conversation. We talked about trade,” Trump said as he hosted a Diwali celebration in the Oval Office of the White House.
“We talked about a lot of things, but mostly the world of trade – he is very interested in that.”
In recent weeks, Trump has softened his rhetoric as the two nations carry out talks to clinch a trade deal and lower tariffs and suggested that Modi was on board with reducing those energy buys
“He is not going to buy much oil from Russia. He wants to see that war end as much as I do. He wants to see the war end with Russia, Ukraine, and as you know, they’re not going to be buying too much oil,” Trump said.
The US president last week also said India had agreed to stop buying oil from Russia, saying he had received assurances from Modi in a phone call.
India’s external affairs ministry, however, had said they were not aware of that conversation. Any effort to scale back Russian energy buys would be a gradual process, and the Modi government has previously indicated that the country would continue to make those purchases if it is economically viable.
India became a major importer of Russian crude after the start of the war in Ukraine in 2022, buying oil at a discount. Russian oil makes up about one-third of India’s overall imports in spite of the US push to curb flows.