Synopsis : India and the United States are reportedly in the final stages of a landmark trade agreement that could slash tariffs on Indian exports from 50% to 15–16%. The deal may also involve India reducing Russian oil imports in exchange for U.S. energy concessions and expanded agricultural trade.
Tariffs on Indian Exports to the U.S. to Drop 15–16% Upon Trade Deal: Report
A game-changing trade agreement between India and the United States is nearing completion, with both nations poised to finalize terms that could cut U.S. tariffs on Indian exports from nearly 50% to just 15–16%, according to a report by Mint.
The deal, expected to be unveiled at the ASEAN Summit later this month, could mark a major breakthrough in bilateral relations, boosting India’s export potential and easing trade frictions that have persisted for years.
Energy and Agricultural Concessions in Focus
Sources indicate that India may agree to gradually reduce Russian oil imports as part of the understanding, in exchange for U.S. concessions on energy trade. This strategic shift could see India diversifying crude oil sourcing toward the United States, potentially strengthening long-term energy security ties.
Additionally, India is expected to permit more non-GMO American corn and soymeal imports to support U.S. farmers, as Washington seeks new markets following a steep drop in exports to China.
Currently, the U.S. exports about 0.5 million tonnes of corn to India annually, but this figure may increase as part of the upcoming agreement.
Economic Impact and Policy Confidence
Chief Economic Advisor V. Anantha Nageswaran recently expressed optimism about the trade talks, predicting that penal tariffs could be lifted by the end of November 2025.
“My personal confidence is that within the next couple of months, we will see a resolution to the extra penal tariff of 25%,” he stated during an event in Kolkata.
He further noted that reciprocal tariffs might also drop from 25% to 10–15%, a move that could significantly improve India’s export competitiveness.
Strategic Implications
India currently imports 34% of its crude oil from Russia and about 10% from the U.S. With the narrowing price gap between Russian and benchmark crude — from $23 a barrel in 2023 to $2–2.50 in mid-October 2025 — the U.S. and Middle Eastern supplies are becoming increasingly viable alternatives.
Experts note that India saved nearly $3.8 billion in FY25 from reduced oil import costs, but the ongoing price realignment may make a U.S.-India energy partnership more attractive.
Trade Significance
The U.S. remains India’s largest merchandise export destination, with bilateral trade touching $86.51 billion in FY25. Although India has managed to sustain export volumes so far, officials warn that prolonged tariff barriers could result in a 30% drop in exports next year if not resolved.
The upcoming trade pact, therefore, could play a vital role in sustaining export growth and reinforcing India’s position as a key global manufacturing and services hub.
Disclaimer : This article is for informational purposes only. It is based on publicly available reports and should not be treated as official confirmation of policy changes. Readers are advised to follow government releases and verified trade documents for final details.
