US, India reach trade deal; Modi to stop Russian oil imports: Trump

The US has reached a trade deal with India, and Indian Prime Minister Narendra Modi has agreed to stop buying Russian oil and buy more oil from the US and possibly Venezuela, US President Donald Trump said Feb. 2.

Under the deal, US will lower its tariff on India to 18%, effective immediately, Trump said in a post on his Truth Social media site. "They will likewise move forward to reduce their tariffs and non-tariff barriers against the United States to zero," he said.

Before the announcement, the US had a 50% tariff on India, as a result of a 25% reciprocal tariff imposed in July and an extra 25% tariff added in August due to India's continued purchases of Russian oil.

A White House official said Feb. 2 that as part of India's agreement to cease Russian oil purchases, the US will drop the extra 25% tariff, bringing the total tariff to 18%, down from 50%.

The agreement to stop buying Russian oil will help end the war in Ukraine, Trump said. Modi also committed to buying more than $500 billion of US energy, technology, agricultural, coal and other products, Trump said.

India has been ramping up its energy diversification strategy, seeking new supply sources and international partnerships.

Indian Oil Corp., India's largest state-run refiner, plans to explore options to boost US crude imports while remaining open to purchasing Venezuelan oil when it becomes available, Chairman Arvinder Sahney told Platts, part of S&P Global Energy, in a recent interview.

Indian refiner Bharat Petroleum Corp. has also taken steps to find new suppliers, and the Jamnagar refinery terminal has halted its purchases of Russian oil in recent weeks.

India's shifts

India's crude buying has undergone transformative changes in 2025, with significantly lower volumes of Russian Urals and incremental growth in Middle East Gulf barrels making up its portfolio as of January, S&P Global Commodities at Sea data shows.

Total Russian exports to India were 436,000 b/d in January, down from 1.5 million b/d a year ago, CAS data shows.

Exports from the US totaled 235,000 b/d in January, up from just 141,000 b/d in January 2025, according to CAS.

Exports from the Middle East Gulf region climbed to 3 million b/d in January, up from 2.5 million b/d in January 2025, CAS data shows. These gains were the result of increased diversification amid US tariffs on India and sanctions on its usual suppliers.

Asian total liquids demand is expected to grow by 420,000 b/d in 2027, according to S&P Global Energy CERA analysts. In Asia, demand growth is more concentrated in emerging economies in South Asia (India) and Southeast Asia, the analysts said in the Global Crude Oil Markets Short-Term Outlook issued Jan. 30.