In a significant development for US-India relations, President Donald Trump revealed a new trade agreement with India on Monday, reducing US tariffs on Indian imports by 7 percentage points to 18%. This move follows Indian Prime Minister Narendra Modi's reported commitment to discontinue buying Russian oil, which has been a vital income stream for Russia during its conflict in Ukraine. Trump detailed the accord in an extensive post on Truth Social after a phone call with Modi.

"It was an honor to speak with Prime Minister Modi of India this morning. He is one of my greatest friends and a powerful, respected leader of his country," Trump stated. "We discussed various topics, including trade and resolving the war between Russia and Ukraine. He agreed to cease purchasing Russian oil and to increase buys from the United States, and possibly Venezuela. This will contribute to ending the war in Ukraine, where thousands are dying weekly."

Effective immediately, the deal lowers the US reciprocal tariff from 25% to 18%, with India committing to remove all tariffs and non-tariff barriers on US products, bringing them to zero. Modi also promised to ramp up "Buy American" initiatives, including more than $500 billion in US energy, technology, agriculture, coal, and other goods. Trump highlighted how this would bolster the US-India partnership, portraying both leaders as action-oriented.

White House officials explained that the pact includes eliminating a 25% punitive tariff placed on Indian goods last August over India's ongoing Russian oil imports. This adjustment reduces the effective rate from up to 50% in certain instances, offering substantial benefits to Indian exporters. As the world's third-largest oil importer, India has relied heavily on discounted Russian crude since the 2022 Ukraine invasion, sometimes comprising 40% of its imports. Transitioning to US and Venezuelan supplies may increase costs for India but supports Trump's aim to economically isolate Russia and expedite the war's resolution.

Prime Minister Modi reacted favorably on X, expressing gratitude to Trump "on behalf of India's 1.4 billion people for this excellent announcement." He emphasized advantages for "Made in India" items and backed Trump's peace initiatives, though he avoided mentioning the oil pledge directly. "When the two largest economies and democracies collaborate, it advantages our citizens and opens vast opportunities," Modi wrote.

The announcement has elicited varied responses. Proponents view it as a victory for American jobs and a setback for Russia's military funding, potentially increasing US oil exports by billions. Skeptics, however, doubt its enforceability, given India's longstanding ties with Russia and historical hesitation to forgo affordable energy. Experts note that while Modi acknowledged the tariff reductions, his post lacked oil specifics, fueling questions about the agreement's timeline.

On the economic front, the accord could rejuvenate bilateral trade, which reached $200 billion last year despite tariff strains. It paves the way for US energy and tech exports while granting India better access to the American market amid concerns of a global economic downturn. Geopolitically, it reflects Trump's "America First" policy, urging partners to oppose foes like Russia.

As global observers monitor developments, this agreement could alter international energy markets and trade patterns, possibly spurring similar talks with other Russian oil purchasers. The enduring camaraderie between Trump and Modi—built during Trump's initial presidency—seems instrumental in this swift progress, hinting at enhanced bilateral relations moving forward.