US cuts India Tariffs, India stops Russian Oil Purchases

Monday, February 2, 2026 - President Trump announced a deal that slashes the U.S. tariff on Indian goods from the stacked 50% to 18%. In exchange, it is stated that India will stop purchasing Russian oil and now will buy oil from the United States and potentially Venezuela.

The White House said the U.S. will be rescinding the 25% tariff on all Indian imports, as well as the stacked 25% punitive tariff from purchasing Russian oil. This has led to other shares of major Indian companies rallying. This could cause more competition within the US market in industries like consultancy, artificial intelligence, IT services, pharmaceuticals, and manufactured goods.

In addition to the cease of purchasing Russian oil, Trump said Indian Prime Minister Narendra Modi committed India to buying more than $500 billion of U.S. goods in energy, technology, agricultural, and other products. Trump also stated that India will work to reduce Indian tariffs and non-tariff barriers against the U.S. to zero although details and timelines are not provided.

As of now, it is unclear when the deal will go into effect and neither party has made comments on more details.  The Russian embassy in Washington also has not made an immediate response. While previous trade agreements of other major Asian partners mentioned commitments to invest U.S. industries, the India announcements has not mentioned such commitment. There is optimism that this is the first step of opening collaboration in the private sector. A group of 800 small businesses named “We Pay the Tariffs,” encourages Americans to not celebrate the deal due to fear of a large increase of tax on India imports. The group noted that the tariffs on Indian imports were 2% to 3% but would now be 18% or higher.

If finalized, the agreement would mark a significant shift in trade relations between the US and India. With limited information available, markets, entities, and businesses await formal action and clarification of the full impact of the agreement.

At Allyn International, we are committed to supporting the global trade community with strategic, forward-thinking solutions to help navigate today’s complex tariff landscape. If you have questions about tariffs or would like to explore strategies to reduce their impact on your business operations, our team is here to help. Contact us today for a consultation at sales@allynintl.com, call 239-489-9900, or reach out here.

Contributor: Kylie McIlravy

---

About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com.