In a significant diplomatic move, former US President Donald Trump and Indian Prime Minister Narendra Modi have solidified a new trade agreement aimed at reshaping global energy dynamics. The leaders, who engaged in a pivotal telephone conversation on Monday, have agreed to terms that will see India cease its purchases of Russian oil in exchange for reduced American tariffs.
Trade Deal Announced on Social Media
Trump took to his Truth Social platform to announce the breakthrough, stating that the United States will immediately lower its reciprocal tariff on Indian goods from 25% to 18%. This decision, he emphasised, stems from a mutual respect and friendship with Prime Minister Modi, who personally requested the adjustment during their discussion.
Impact on the Ukraine Conflict
In his post, Trump highlighted that this agreement is intended to contribute to ending the ongoing war in Ukraine, which he noted results in thousands of casualties weekly. By cutting off a major revenue stream for Russia through India's oil imports, the deal aims to apply economic pressure on Moscow.
India, as the second-largest buyer of Russian crude, has seen its imports strain relations with the US in recent years. The new commitment marks a strategic shift, with Modi pledging to redirect India's energy purchases towards the United States and potentially Venezuela, thereby bolstering American economic interests.
Substantial Economic Commitments
Beyond the tariff reduction, Trump revealed that Modi has committed to purchasing over $500 billion worth of US products. This extensive package includes energy resources, advanced technology, agricultural goods, and various other items, significantly enhancing bilateral trade ties.
Strengthening Bilateral Relations
Trump praised the strengthened partnership, asserting in his social media message that their collaboration demonstrates effective leadership. "Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most," he wrote, underscoring the proactive nature of their diplomacy.
The announcement, made from the White House in Washington DC where the leaders previously met on 13 February 2025, signals a deepening of US-India relations. This deal not only addresses immediate trade concerns but also positions both nations for increased cooperation in global markets, with potential ripple effects on international oil trade and geopolitical alliances.
