By David Goldman, CNN
(CNN) — President Donald Trump on Monday announced he would reduce tariffs on Indian goods in exchange for, among other things, a promise to stop buying Russian oil.
That will be a tall task: India has been importing roughly 1.5 million barrels of Russian oil each day — even months after Trump placed tariffs on Indian goods as punishment — according to Kpler, a global trade data provider. Russian oil makes up more than a third of India’s overall imports.
Trump said in a social media post that he spoke Monday morning with Indian Prime Minister Narendra Modi, who agreed to replace the country’s Russian crude imports with oil from Venezuela and the United States. Venezuelan oil is of the same quality as Russian oil — heavy, sour and perfect for making derivatives like fuel oil and diesel.
It’s not clear, however, how long that transition may take. Venezuela’s oil infrastructure is dilapidated and requires about a decade of work and tens of billions of investment dollars to return it to the more-than-3 million barrels a day output it had achieved before the country’s Socialist government took control in 1999.
India is a major purchaser of Russian oil, which has been sanctioned by most Western countries because of Russian President Vladimir Putin’s war with Ukraine. China buys significantly more Russian oil than India — and unlike India, China hasn’t faced additional tariffs for purchasing Russian oil. Turkey is a distant third.
Indian government officials have defended purchasing Russian oil previously, calling it essential to the country’s energy security. India is the world’s third-largest consumer of oil, and Russia is a close-by seller. India relies on its crude to support its fast-growing economy, fueled by the world’s largest population.
And Russian oil trades at a significant discount to OPEC or US crude.
US crude prices were down 5% on Monday, but that was mostly unchanged from where oil was trading before Trump’s announcement. Oil fell sharply earlier in the day because traders were hopeful the United States would reach a negotiation with Iran without striking the crude-rich country.
Tariff relief
Trump said Indian goods would immediately face an 18% tariff, down from a 50% – a rate that had included an additional 25% tariff Trump put in place in August to persuade India to stop purchasing Russian oil. A White House spokesperson told CNN that Trump will fully remove the additional tariff and reduce the so-called reciprocal tariff.
Indian goods had among the highest tariff rates imposed by the Trump administration.
Trump, calling Modi “one of my greatest friends,” also said India’s prime minister agreed to reduce India’s tariffs on US goods to zero, and to remove unspecified non-tariff barriers. Although Trump didn’t explain which barriers would be removed, those often include special taxes on US companies’ services or value-added taxes on goods.
India also pledged to invest in American goods “at a much higher level” in addition to a $500 billion invesment in US energy, technology, agriculture and coal among other products, Trump said.
Although India isn’t one of America’s largest trading partners, the reduction in tariffs could nevertheless make a meaningful dent: The United States imported $95.5 billion in goods from India in 2025 as of November, 3% of the value of total imported goods, and it exported $42 billion of goods there over that time, according to the US Census Bureau.
Among the top goods the US imported from India last year are computers and other electronics, such as phones, pharmaceuticals, apparel and chemicals. Jewelry prices in the United States have risen i