China’s ‘No’ Turns Into Windfall For New Delhi? India-US Trade Deal Nears Breakthrough; Trump Poised To Slash Tariffs – How This Will Hit Your Wallet | World News

New Delhi: India and the US are reportedly on the verge of finalizing a major trade deal that could reduce US tariffs on Indian exports. Currently, the United States imposes around 50% tariffs on many Indian products. If an agreement is reached, this rate could drop to 15-16%, providing a great support to exporters and the economy. The long-delayed agreement is now gaining traction as discussions on energy cooperation and access to agriculture progress rapidly.

Will the White House’s punitive tariffs go away? Speaking at the Kolkata event hosted by the Indian Chamber of Commerce, Chief Economic Advisor V. Anantha Nageswaran expressed confidence in the outcome. “While I don’t have a magic wand or access to the inside, I personally believe that within the next few months, or perhaps sooner, we will see the resolution of the additional 25% punitive tariffs,” he said.

These taxes caused difficulties for Indian exporters.

Nageswaran added that negotiations on mutual tariffs are continuing. “It is possible that these 25 percent mutual tariffs may also decrease to the expected level of 15-16 percent,” he said. If this happens, it will be a moment of celebration for India’s business sector.

In fiscal year 2024-25, India exported $86.51 billion to the US, its largest market. Nageswaran said the impact of tariffs is limited this year as India has already captured half of the volume.

But maintaining the 50 percent rate would cause exports to fall by 30 percent next year; This could be a heavy blow for an economy where exports contribute roughly a quarter of GDP. A trade agreement could prevent this decline.

Energy Ties Support the Agreement

The energy strategy is a central pillar of the proposed agreement. Reports suggest that India may gradually reduce crude oil imports from Russia as part of broader economic cooperation with Washington. Russia’s oil purchases had previously triggered a 25% punitive tariff. Currently, India imports about 34% of its crude oil from Russia, while about 10% comes from the United States.

India could allow ethanol imports and reduce Russia’s crude oil purchases. In return, the United States is likely to make concessions on energy trade. State oil companies may diversify their resources with US crude oil. Latest reports show that the price gap between discounted Russian crude and benchmark oil has narrowed from $23 to just $2-2.50 per barrel in 2023, making Middle East and US crude more competitive.

The trade agreement also touches on agriculture. India can increase US access to non-GMO corn and soybean meal. U.S. exporters face shrinking markets, especially after China drastically reduced corn imports ($5.2 billion in 2022 to $331 million in 2024). India could become a major buyer of American agricultural products.

The energy issue dominated the agenda of the recent telephone conversation between US President Donald Trump and Prime Minister Narendra Modi. The US president later claimed that Prime Minister Modi had assured him that India would limit oil purchases from Russia.

Prime Minister Modi accepted the call and underlined “constructive participation” but did not provide additional details. He used X (formerly Twitter) to express his appreciation for the support from Washington.

“Thank you, President Trump, for your phone call and warm Diwali greetings. In this festival of lights, may our two great democracies continue to enlighten the world with hope and stand together against all forms of terrorism,” the Prime Minister said.

Thank you, President Trump, for your phone call and warm Diwali greetings. In this festival of lights, may our two great democracies continue to enlighten the world with hope and stand united against all forms of terrorism.@realdonaldtrump @POTUS—Narendra Modi (@narendramodi) 22 October 2025

Possible Announcement at ASEAN Summit

The trade agreement may include mechanisms for periodic review of tariffs and market access; thus allowing India and the US to adjust terms over time.

Officials from the Commerce Department and the White House have not officially commented, but reports indicate that a formal announcement could coincide with the ASEAN Summit later this month.

However, Prime Minister Narendra Modi is unlikely to travel to Malaysia to attend meetings related to the ASEAN summit from Sunday due to scheduling issues, people familiar with the matter told PTI on Wednesday.

If concluded, this agreement could mark one of the most significant shifts in India-US trade relations in recent years; It could reshape tariffs, accelerate agricultural exchanges and signal a new phase in strategic energy alignment.