New Delhi, October 23, 2025: In a major step toward strengthening economic ties, India and the United States are close to finalizing a landmark trade agreement that could reshape bilateral commerce. The deal, expected to be announced ahead of the upcoming ASEAN Summit, aims to reduce existing tariffs and open new agricultural and energy markets for both nations.
According to officials familiar with the discussions, the U.S. is likely to cut the 50% tariff it imposed on Indian imports earlier this year, bringing it down to around 15–16%. The decision is seen as a major diplomatic win for both countries and a signal of renewed cooperation after months of trade tension.
India to Reduce Russian Oil Imports, Boost U.S. Trade Access
As part of the agreement, India has reportedly agreed to reduce its crude oil purchases from Russia, a move that aligns with Washington’s broader energy policy goals. India currently imports about 34% of its crude oil from Russia and 10% from the U.S.
In exchange, India has sought similar concessions from the U.S. to ensure a balanced and fair trade relationship. The U.S., in turn, has expressed readiness to expand agricultural exports to India, particularly in soybean, corn (maize), and ethanol, as part of the deal.
This development could benefit both nations — the U.S. gains a vast new market for its farm exports, while India secures reliable access to high-quality agricultural and energy products at competitive prices.
Reviving Bilateral Trade Relations
The two countries have been engaged in active negotiations for several months to restore normal trade relations. The process gained momentum after both governments expressed interest in moving past tariff disputes that arose earlier this year.
In April 2025, the U.S. had imposed a 25% countervailing duty on certain Indian goods and an additional 25% levy in response to India’s purchase of discounted Russian oil. Combined, these created a 50% tariff wall on Indian exports. The new agreement would effectively roll back most of these duties, a development that experts say could reignite two-way trade and investment flows.
India’s Chief Economic Advisor had earlier expressed optimism that a resolution would be reached soon — and the current progress suggests that vision is now becoming reality.
Opening Doors for Farmers and Energy Cooperation
For India, the trade pact represents an opportunity to diversify its energy imports and strengthen food security through stable supplies of essential commodities like soybeans and maize. For the U.S., it’s a strategic opportunity to rebuild agricultural export markets, especially after declining trade with China in recent years.
The inclusion of ethanol imports also aligns with India’s ongoing push for cleaner fuels and its target of 20% ethanol blending in petrol by 2025. This cooperation could accelerate India’s renewable energy transition while creating export opportunities for American producers.
Strategic Importance and Global Implications
The India–U.S. trade agreement is not merely an economic arrangement; it holds wider geopolitical importance. It demonstrates how both countries are willing to balance national interests with global responsibilities, especially in areas like energy, agriculture, and sustainable development.
The potential announcement by Prime Minister Narendra Modi and U.S. President Donald Trump at the ASEAN Summit could mark a symbolic reset in relations, emphasizing mutual respect and long-term partnership.
A Win–Win for Both Nations
If finalized, the deal could pave the way for stronger trade integration, investment cooperation, and technological exchange between the world’s two largest democracies.
By reducing tariffs, expanding markets, and aligning on key policy issues, India and the U.S. are signaling a shared commitment to stability, growth, and prosperity.
This agreement, once formalized, could become a cornerstone of a new era in India–U.S. relations — one that is built on trust, collaboration, and mutual economic benefit.