The United States has agreed to remove the 25 percent additional tariff imposed on India for buying Russian crude, easing a key friction point in bilateral energy trade, according to a Bloomberg report citing an Indian official.
President Donald Trump on Monday announced that Washington and New Delhi had reached a trade understanding to reduce the reciprocal tariff level from 25 percent to 18 percent. The 25 percent surcharge, introduced in August after India continued to source discounted Russian oil despite Western sanctions, will now be withdrawn, the official said, requesting anonymity as details are yet to be formally disclosed.
The move signals greater flexibility in the US approach toward India’s energy procurement, which has been shaped by price considerations and domestic fuel security. Since 2022, Russia has emerged as one of India’s top crude suppliers, helping refiners contain costs amid volatile global markets.
As part of the broader trade engagement, India has reportedly committed to purchase $500 billion worth of US goods over five years, including energy commodities such as crude oil, Liquified Natural (LNG) and coking coal. The commitment is expected to support diversification of India’s import basket while addressing Washington’s concerns over trade imbalances.
Energy analysts say the removal of the penalty could stabilise India’s access to Russian barrels without attracting punitive costs, even as refiners gradually expand purchases from the US. The development also reflects Washington’s recognition of India’s strategic need for affordable supplies to keep domestic fuel prices in check.
