Trump and Modi Negotiate Trade Deal to Curb Russian Oil

President Donald Trump and Prime Minister Narendra Modi are negotiating a bilateral trade agreement to reduce U.S. tariffs on Indian goods from 50 percent to approximately 15–16 percent. In exchange, the U.S. expects India to gradually limit its imports of Russian crude oil and increase purchases of American energy and agricultural products, including non-GM corn and soybeans. The deal may be formally announced at the upcoming ASEAN or APEC summits.

The negotiations follow a period of severe diplomatic strain. The Trump administration imposed 50 percent tariffs on Indian exports, including a 25 percent penalty specifically linked to Russian oil purchases, which the U.S. claims fund Russia's war in Ukraine. India initially labeled these tariffs as unfair and unjustified, diversifying its export markets to mitigate losses.

Conflicting narratives emerged regarding a series of phone calls between the leaders in October 2025. Trump repeatedly claimed that Modi personally assured him India would stop or significantly reduce Russian oil imports. While Modi acknowledged a call for Diwali greetings on October 21 and 22, the Ministry of External Affairs of India initially denied that any conversations regarding oil had taken place, asserting that energy policies are guided by national interests and consumer protection. Some market data suggested Indian imports of Russian crude actually rose during this period.

Additionally, Trump claimed he brokered a ceasefire between India and Pakistan in May to prevent nuclear war, an assertion the Government of India refuted, maintaining the ceasefire resulted from direct bilateral military talks. Tensions were further highlighted by the Indian National Congress, which accused Modi of outsourcing key national decisions to Washington.