For months, the United States and India have been locked in high-stakes negotiations, with tariffs, oil, and agricultural trade at the heart of the talks. Now, both nations appear to be on the cusp of a breakthrough: a sweeping trade deal that could slash U.S. tariffs on Indian exports from a punishing 50% to a much more manageable 15-16%, while nudging India to gradually reduce its imports of Russian crude oil. The agreement, if finalized, could be announced as early as the upcoming ASEAN summit in Malaysia, according to several sources cited by Mint and confirmed by reporting from BBC, CNBC, and Bloomberg.
The stakes are high. Tariff hikes imposed by the Trump administration in August 2025—an additional 25% on top of an existing 25%—were intended as punishment for India’s continued purchase of Russian oil, which the U.S. argues helps fund Moscow’s war effort in Ukraine. As President Trump bluntly warned, India would keep paying “massive” tariffs unless it backed away from Russian crude. On October 21, 2025, Trump told reporters, “He’s not going to buy much oil from Russia. He wants to see that war end as much as I do. He wants to see the war end with Russia, Ukraine, and as you know, they’re not going to be buying too much oil.” Trump claimed that Indian Prime Minister Narendra Modi had assured him in a phone call that India would scale back those purchases—a claim Modi acknowledged only in part, thanking Trump for his “warm greetings” on Diwali in a social media post, but notably omitting any reference to Russian oil.
India’s official stance has been measured. Randhir Jaiswal, spokesperson for the Ministry of External Affairs, emphasized, “India is a significant importer of oil and gas. It has been our consistent priority to safeguard the interests of the Indian consumer in a volatile energy scenario. Our import policies are guided entirely by this objective.” This careful phrasing reflects the delicate balance New Delhi must maintain: ensuring affordable energy for its 1.4 billion citizens while navigating the geopolitical crosswinds of the U.S.-Russia rivalry.
Since Western sanctions on Moscow following the 2022 Ukraine invasion, India has dramatically ramped up Russian oil imports—becoming the world’s second-largest buyer after China. In the first half of 2025 alone, India imported 1.6 million barrels per day of Russian crude, up from just 50,000 barrels per day in 2020, according to the U.S. Energy Information Administration. Russian oil now accounts for about 34% of India’s total crude imports. The U.S., meanwhile, supplies about 10% of India’s oil and gas needs by value, and Indian officials have signaled willingness to increase purchases from the U.S. if the price is right.
The potential trade deal is not solely about oil. As Mint and CNBC report, India is weighing an increase in its annual quota for non-genetically modified (GM) American corn imports—currently capped at 0.5 million tonnes, with a 15% duty. There are also talks about allowing more U.S. soymeal into the Indian market, though this has sparked concern among domestic producers. D.N. Pathak, executive director of the Soybean Processors Association of India, warned, “Farmers are already struggling to get even the minimum support price for their produce, and any relaxation for foreign soyameal will push domestic prices down further. Such a move could hurt local processors and discourage soybean cultivation at a time when the sector is already under pressure.”
For the U.S., agricultural access is a key demand, especially as China has sharply reduced its imports of American corn—from $5.2 billion in 2022 to just $331 million in 2024—leaving Washington eager to find new buyers. Ajay Srivastava, co-founder of the Global Trade Research Initiative, observed, “China’s tighter control over rare-earth exports and the deepening US–China trade war are forcing Washington to rethink its strategy with allies as it seeks reliable partners to build alternative supply chains. This could accelerate a deal with India.”
Energy, too, remains a sticking point. The White House has reportedly made it clear that stopping Russian oil imports is a precondition for finalizing the trade agreement. However, as one Indian official told Mint, “The Indian side may not make any formal announcement on this front. Instead, state-run oil marketing companies are expected to be informally advised to diversify crude sourcing towards the US.” At the same time, Indian negotiators are pushing for a mechanism to revisit tariffs and market access over time, ensuring flexibility as global markets evolve.
Market watchers are already reacting to the prospect of a deal. On October 22, 2025, oil prices jumped—Brent crude rose by as much as 1.9% to above $62 per barrel, and West Texas Intermediate climbed toward $59—following reports that India might gradually reduce Russian oil imports. Vandana Hari, founder of Vanda Insights, told Bloomberg, “A truce would be positive for economic momentum and prop up oil demand sentiment. In the event that the deal entails a reduction in Indian imports of Russian crude, that would be supportive too.”
Behind the scenes, sensitive issues remain. Agriculture and energy are still awaiting political clearance, and neither Trump nor Modi has officially confirmed attendance at the ASEAN summit where the deal could be unveiled. Both sides have previously announced—and missed—deadlines, but Indian negotiators are aiming for a November 2025 conclusion. The agreement is expected to include a review mechanism, allowing for adjustments after a fixed period as market conditions change.
Trade between the two nations is already robust. Data from the India Brand Equity Foundation shows bilateral trade reached a record $132.2 billion in the fiscal year ending March 2025, up more than 10% from the previous year. In the first half of fiscal year 2026, trade stood at $71.41 billion, with Indian exports to the U.S. rising 13.4% and imports from the U.S. up 9%.
Despite the optimism, some Indian industries remain wary. The potential influx of American farm products could put pressure on local prices, while increased U.S. energy imports hinge on price competitiveness. Trade experts caution that India must hold firm on its “red lines” in agriculture, digital trade, and intellectual property, and avoid any clauses that could limit its strategic autonomy in the region.
As the world watches, the outcome of these negotiations could reshape not only the U.S.-India economic relationship, but also the global energy and trade landscape. With the ASEAN summit around the corner, all eyes are on Washington and New Delhi—will they finally seal the deal?