Source The Hindu
WASHINGTON, D.C. — In a landmark shift that reshapes global energy and trade dynamics, the White House has announced a monumental agreement with New Delhi. Under the new deal, India has committed to ending its reliance on Russian oil and pledged $500 billion in investments and purchases across the United States.
White House Press Secretary Karoline Leavitt confirmed the details on Tuesday, following a direct call between U.S. President Donald Trump and Indian Prime Minister Narendra Modi. The agreement marks a decisive “reset” in bilateral relations after a period of escalating trade tensions and punitive tariffs.
A Strategic Energy Shift
The centerpiece of the deal is India’s commitment to “no longer” purchase Russian crude, a practice that had surged since 2022. Instead, India will pivot its energy procurement toward the United States and potentially other Western-aligned sources.
“India is committed to not only no longer purchasing Russian oil, but buying oil from the United States,” Leavitt told reporters. “This will have a direct benefit on the United States and the American people.”
The move addresses a primary friction point for the Trump administration, which had previously imposed a 25% penalty tariff on Indian goods specifically linked to New Delhi’s continued energy ties with Moscow.
The $500 Billion Commitment
Beyond energy, the trade pact outlines a massive economic injection into the American economy. Prime Minister Modi has reportedly committed to $500 billion in investments and purchases over the coming years, targeting three critical sectors:
Energy: Large-scale imports of U.S. crude oil, liquefied natural gas (LNG), and coal.
Transportation: Significant orders for American aircraft and automotive technology.
Agriculture: Increased market access for U.S. farmers, aimed at reducing the long-standing trade deficit.
Tariff Relief and Economic Impact
As a reciprocal gesture, the United States has moved to slash tariffs on Indian exports. The overall duty on “Made in India” products has been reduced from as high as 50% (including the Russian-oil penalty) to a flat 18%.
This reduction is expected to provide an immediate boost to Indian MSMEs, textiles, and engineering sectors, making Indian goods more competitive in the U.S. market compared to regional rivals.
Global Implications
The deal is being viewed by analysts as a strategic masterstroke for both nations:
For the U.S.: It secures a massive export market and further isolates Russia’s economy.
For India: It secures long-term energy stability and removes the threat of trade wars, while positioning the country as a primary manufacturing alternative to China.
While the Kremlin has stated it has yet to receive official notification from New Delhi regarding a halt in oil purchases, the White House maintains that the agreement is “effective immediately.”
