India and the United States are moving closer to finalising a long-pending bilateral trade agreement that could significantly reduce American tariffs on Indian imports — from nearly 50 per cent to around 15–16 per cent, according to a Mint report quoting sources familiar with the matter.
The trade pact, which focuses on energy and agriculture, is expected to be announced during the ASEAN Summit later this month, where Prime Minister Narendra Modi and US President Donald Trump are scheduled to meet.
Focus on Energy and Agriculture
The proposed deal aims to boost two-way trade by addressing key issues such as energy cooperation, agricultural imports, and market access. India may gradually scale down its imports of Russian crude oil, while the United States is expected to reduce punitive tariffs on Indian exports.
Currently, Russia accounts for about 34 per cent of India’s crude oil imports, while around 10 per cent of India’s energy requirements are met by the US.
Trump confirmed he spoke with Prime Minister Modi on Tuesday, stating that their discussion “largely focused on trade and energy.” He added, “Modi assured me that India will limit its oil purchases from Russia.”
The United States had earlier imposed a 25 per cent levy on Indian exports as a retaliatory measure for India’s continued Russian oil imports.
India May Ease Market Access for US Farm Products
Under the deal, India may open its markets further to non-genetically modified (non-GM) American corn and soymeal, key demands from Washington.
Officials said New Delhi is considering raising the import quota for non-GM maize while maintaining the existing 15 per cent duty. The current import limit stands at 0.5 million tonnes annually.
Discussions are also progressing on non-GM soymeal imports for both human and livestock consumption. However, there is still no final clarity on tariff reductions for dairy products, including high-end cheeses, which remain a key US request.
Energy Diversification and US Concessions
India may gradually reduce its reliance on Russian oil and diversify its crude sourcing toward the US. In exchange, Washington is expected to offer energy trade concessions, including ethanol imports to India.
Indian officials have reportedly conveyed to Moscow that oil imports from Russia will be scaled down in phases, though India will continue to prioritise economic viability and national interest.
Trump Signals Progress Ahead of ASEAN Summit
Speaking at a Diwali celebration at the White House, President Trump reiterated that New Delhi was on board with reducing Russian energy imports.
“We had a great conversation. We talked about trade — a lot of things, but mostly trade. Prime Minister Modi wants to see the war end as much as I do,” Trump said.
He added that Modi “is not going to buy much oil from Russia” as both nations aim to promote global stability and strengthen economic ties.
However, India’s Ministry of External Affairs clarified last week that it was not aware of the specific conversation Trump referred to, emphasizing that any move to scale back Russian energy purchases would be gradual and interest-driven.
A Step Toward Stronger Strategic Partnership
If finalised, the deal would mark a major milestone in India–US economic relations, reducing trade barriers, improving energy collaboration, and enhancing mutual market access.
The expected announcement at the ASEAN Summit could reinforce both nations’ shared goal of fostering a fair, resilient, and inclusive global trade environment.
