Washington moved to roll back an additional 25 per cent tariff on goods from India on Friday, formalising a trade understanding announced earlier this week and tying the relief to New Delhi’s commitment to halt purchases of Russian oil and expand energy and defence cooperation with the United States.The decision was set out in an executive order signed by US President Donald Trump, which stated that India had agreed to stop “directly or indirectly importing Russian Federation oil”. The order also cited commitments by New Delhi to buy US energy products and to work within a framework with Washington to broaden defence cooperation over the next decade.
The tariff relief applies to the extra levy imposed during negotiations, rather than the baseline duties that continue to govern bilateral trade. US officials said the step was designed to lock in the terms of the understanding and provide certainty to companies that had been awaiting clarity after the announcement of the deal earlier in the week.
Trade officials familiar with the discussions said the oil pledge was central to the agreement, reflecting Washington’s effort to curb Moscow’s energy revenues while reshaping supply chains among major partners. India had sharply increased purchases of discounted Russian crude after Western sanctions on Moscow disrupted traditional trade flows, a move that had drawn repeated scrutiny from the US Congress and administration officials.
The executive order framed the shift as a voluntary commitment by New Delhi, rather than a unilateral concession extracted through pressure. It also emphasised energy security and defence cooperation as parallel pillars of the relationship, signalling that the trade measure was part of a broader strategic recalibration rather than a narrow tariff adjustment.
In New Delhi, officials said the understanding aligned with a longer-term effort to diversify energy imports and stabilise prices. While Russian crude had become a significant component of supply over the past two years, refiners had already been exploring alternative sources as discounts narrowed and logistics costs rose. The pledge to increase purchases of US energy products, including crude oil and liquefied natural gas, was presented as a commercial decision supported by long-term contracts and infrastructure planning.
The defence element of the framework points to continuity in military ties that have expanded steadily, encompassing joint exercises, technology sharing and procurement. The reference to a ten-year horizon suggests an intention to give predictability to defence industries and armed forces planners on both sides, particularly as Washington seeks to strengthen partnerships in the Indo-Pacific.
Economists said the removal of the additional tariff would ease pressure on exporters of labour-intensive goods, including textiles, engineering products and chemicals, that had been caught in the uncertainty surrounding the negotiations. While the levy had not been in place long enough to reshape trade flows materially, companies had warned that prolonged ambiguity could disrupt orders and pricing.
At the same time, analysts cautioned that the broader tariff landscape remains complex. The rollback does not eliminate all duties affecting bilateral trade, and it does not address longstanding disputes over market access, digital trade rules and agricultural standards. The executive order leaves those issues to future talks, underscoring that the agreement announced this week is a partial settlement rather than a comprehensive free trade pact.
Energy market specialists noted that the pledge to stop importing Russian oil would be closely watched for implementation details. The executive order’s language covers both direct and indirect imports, a formulation intended to prevent rerouting through intermediaries. Monitoring compliance will require coordination among customs authorities, refiners and shipping companies, and could have knock-on effects for global crude pricing if demand shifts materially.
For Washington, the move allows the administration to claim progress on both trade and sanctions enforcement ahead of a year in which economic policy and foreign relations are expected to feature prominently. By linking tariff relief to energy and defence commitments, the White House has sought to present the agreement as advancing economic interests while reinforcing strategic objectives.