India and the United States are on the verge of finalising a significant trade agreement that could see US tariffs on Indian imports reduced from the current 50% to approximately 15-16%. This development comes as India has reportedly agreed to decrease its reliance on Russian oil, a move that aligns with US efforts to limit global dependence on Russian energy amid the ongoing conflict in Ukraine.

The negotiations, which have been ongoing for some time, focus primarily on the energy and agriculture sectors. As part of the deal, India may allow increased imports of non-genetically modified corn and soymeal from the US, addressing rising domestic demand in sectors such as poultry feed and dairy. However, discussions regarding tariff reductions for dairy products, including high-end cheese, remain unresolved.

US President Donald Trump confirmed that he spoke with Indian Prime Minister Narendra Modi about trade and energy cooperation. Trump stated, "Modi assured me that India would limit its oil purchases from Russia. He’s not going to buy much oil from Russia. He wants to see that war end as much as I do." Modi acknowledged the conversation but did not provide specific details about their discussions.

Currently, Russia accounts for about 34% of India's crude oil imports, while the US supplies around 10% of India's oil and gas needs. The bilateral trade between India and the US reached $71.41 billion in the first half of FY26, marking an 11.8% increase year-on-year.

The finalisation of the trade agreement is expected to be announced at the upcoming ASEAN Summit, which could serve as a platform for both nations to signal a renewed phase of cooperation. If successful, this deal would represent a significant step forward in India-US trade relations, which have faced challenges in recent years due to tariff disputes and geopolitical tensions.

As both countries work towards concluding the agreement, the Indian government has not yet confirmed the specifics regarding Russian oil purchases, and it remains to be seen how these negotiations will impact local farmers and the broader agricultural sector in India.