US president Donald Trump said tariffs on India will be lowered “very substantially”, signalling an easing of tensions over New Delhi’s Russian oil purchases as the two countries near a trade deal.
Mint first reported on 22 September that US tariffs on India may be reduced to 15-16% from a steep 50%, and that a deal is likely to be announced in November. Speaking to reporters at the White House on Monday (US time), Trump said the US is “getting close” to reaching a trade agreement with India, and that tariffs will be reduced “at some point”.
“We’re working on a very good deal with India. The tariffs will come down very substantially. It will happen at some point,” Trump told reporters at the swearing-in ceremony of Sergio Gor as the US ambassador to India.
The statement comes as the two sides enter the final round of talks to conclude a Bilateral Trade Agreement (BTA), aimed at resolving long-standing issues related to market access, tariffs and investment rules.
The fall 2025 deadline was set by the leaders of India and the US after Indian Prime Minister Narendra Modi’s visit to Washington in February this year. In a joint statement on 13 February, they committed to concluding a BTA by the fall of 2025, which, as per the Indian calendar, falls between September and November.
Queries sent to the Union commerce ministry remained unanswered.
A senior government official said on Tuesday that India does not see the need for additional rounds of negotiations at this stage, as discussions between the two sides are progressing well. “New Delhi is now awaiting Washington’s formal response to its proposal, which was shared during the recent round of BTA talks.”
The official added that India and the US are negotiating a comprehensive, WTO-compliant trade deal that addresses tariff and non-tariff barriers while promoting a predictable trade environment.
“We have taken into account the sensitivities of each sector during the talks to ensure the agreement supports India’s long-term trade interests,” the official said on the condition of anonymity.
The US has imposed steep tariffs on a wide range of Indian goods in response to India’s continued purchases of Russian crude oil. The overall 50% tariff, the highest among all of America’s trading partners, came into effect on 27 August, leading to a significant decline in foreign shipments.
However, regarding the purchase of oil from Russia, New Delhi has maintained that its imports are guided by national interest and the need to ensure price stability, while continuing to engage diplomatically with Washington to avoid further trade disruptions.
As per commerce ministry data, bilateral trade between India and the US stood at $71.41 billion in the first six months of FY26, up 11.8% from $63.89 billion a year earlier. Exports to the US grew 13.4%, rising from $40.42 billion in H1 FY25 to $45.82 billion, while imports increased 9%, from $23.47 billion to $25.59 billion.
A recent report by the Global Trade Research Initiative (GTRI) that between May and September, India’s exports to the US fell 37.5%, dropping from $8.8 billion to $5.5 billion, marking one of the sharpest short-term declines in recent years. The report further stated that even tariff-free products suffered the most, with exports of smartphones and pharmaceuticals plunging 58% and 15.7%, respectively. Industrial metals and auto parts, which faced uniform tariffs for all suppliers, saw a milder 16.7% fall, largely due to slowing US demand rather than competitiveness issues.
Ajay Srivastava, co-founder of the Global Trade Research Initiative, said exporters need immediate policy support to weather the tariff impact. “Priority measures should include enhanced interest-equalisation support to reduce financing costs, faster duty remission to ease liquidity pressure, and emergency credit lines for MSME exporters. Without urgent intervention, India risks losing market share to Vietnam, Mexico, and China—even in sectors where it previously held a strong position,” he said.
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