US President Donald Trump announced on February 2 that the United States would reduce an additional 25 percent tariff on Indian goods to 18 percent following a phone call with Indian Prime Minister Narendra Modi. Trump stated that the reduction came after Modi agreed to stop purchasing Russian oil. He also said that Washington and New Delhi agreed to eliminate tariffs and non-tariff barriers on US goods and that India would purchase more than $500 billion worth of US energy, technology, agricultural, coal, and other products.

Trump further stated that India would replace Russian oil purchases with Venezuelan oil rather than Iranian supplies. Speaking to reporters aboard Air Force One, he said an agreement had been reached in principle for India to buy oil from Venezuela. India had previously stopped purchasing Venezuelan oil last year after the US imposed a 25 percent tariff on countries buying oil from Caracas. New Delhi had also halted Iranian oil imports in 2019 due to US sanctions related to Iran’s nuclear program.

After US sanctions were imposed on Russia following its invasion of Ukraine in 2022, Indian refiners shifted to buying discounted Russian crude, prompting Trump to impose the additional 25 percent tariff on Indian goods in August. Trump also suggested that China could reach a separate agreement to resume Venezuelan oil purchases. Venezuelan oil exports to China averaged about 400,000 barrels per day last year but dropped to zero last month amid a US naval blockade targeting vessels transporting sanctioned oil.