New Delhi has put forward what officials describe as a revised “final” trade offer to Washington, but the sharper priority appears to be securing the clean removal, or firm closure, of the additional 25% U. S. tariff tied to purchases of Russian oil, according to two people familiar with the matter. That focus underlines how energy security and geopolitics continue to shape the commercial relationship between the two countries, even as both sides try to present the negotiations as a wider market-access bargain. Any such push from India comes against a complicated backdrop. Washington imposed the extra 25% tariff in August 2025, arguing that continued imports of Russian crude were undermining its pressure campaign on Moscow. The move stacked on top of other duties and drove tariffs on some Indian exports to punishing levels, straining one of the world’s most strategically important bilateral relationships at a time when both governments were also trying to deepen defence, technology and supply-chain cooperation.
The chronology matters because the U. S. announced in early February 2026 that it would cut tariffs on Indian goods to 18% from 50% under a trade arrangement that was presented as part of a broader reset. Reuters reported at the time that a White House official said the punitive 25% duty linked to Russian oil would be rescinded, and a later executive action was reported to have removed that levy effective February 7. If Indian negotiators are still pressing the issue now, it suggests New Delhi wants certainty over implementation, scope or durability rather than merely a headline commitment.
That would not be surprising. Trade officials and exporters tend to look beyond political announcements to the fine print of customs enforcement, tariff schedules and the risk of policy reversal. For India, the difference between a tariff being politically waived and being fully settled in administrative practice can shape planning for sectors ranging from engineering goods and textiles to pharmaceuticals and auto components. It also affects investor sentiment at a time when manufacturers are looking for predictable access to the U. S. market.
People familiar with the talks say India’s revised offer includes faster movement on tariff reductions for selected U. S. products, including agricultural items such as walnuts, almonds and apples, alongside industrial goods. Such concessions fit a pattern seen in previous rounds of India-U. S. bargaining, where New Delhi has shown willingness to open specific lines while resisting a broader surrender of policy space in politically sensitive areas such as agriculture, digital regulation and public procurement. The strategy allows India to signal flexibility without appearing to fold on domestic red lines.
Energy remains the hardest part of the equation. Cheaper Russian crude became a major support for India’s import bill after the war in Ukraine reshaped global oil flows. Buying discounted barrels helped refiners and softened inflationary pressure in a country that imports the overwhelming majority of its crude needs. Yet the same trade created a political and diplomatic vulnerability with Washington, especially after the tariff dispute turned oil purchases into a test of alignment rather than simply a commercial decision. Reuters reported in February that Indian refiners had curtailed Russian buying as trade talks intensified, only for fresh geopolitical shocks in West Asia to complicate the picture again by tightening supply concerns and reviving the logic of discounted imports.
That tension explains why the present phase of negotiations is about more than customs rates. For Washington, the tariff has been leverage to change behaviour on Russian energy and to extract wider market concessions. For New Delhi, the task is to preserve strategic autonomy while preventing a tariff regime from eroding export competitiveness in its largest or second-largest major market, depending on the sector. Neither side wants a public rupture, but neither has fully escaped the mistrust created over the past year.
Business groups on both sides have reason to want a cleaner settlement. U. S. exporters see India as a growth market for farm products, energy supplies and advanced manufacturing inputs. Indian companies want lower and more predictable access to U. S. consumers just as global firms rethink supply chains away from excessive dependence on China. A durable arrangement would fit the broader economic logic of the relationship. A partial or ambiguous arrangement would leave companies exposed to renewed volatility.