The United States has withdrawn the additional 25% tariff imposed on select Indian goods that had been linked to India’s purchases of Russian crude oil. The move was formalised through an executive order and came into effect on February 7, 2026.

With the rollback of the extra levy, Indian exports to the US will no longer face the higher duties introduced last summer. In some cases, the earlier measure had driven total tariff rates on affected products to nearly 50%.

Tariff Relief Linked to Oil Import Commitments

The decision follows India’s assurance that it would halt both direct and indirect imports of Russian crude oil. According to the executive order, the removal of the additional tariff is directly tied to this commitment.

US authorities have, however, retained the right to reimpose the extra duty if India is found to have resumed purchases of Russian oil in the future.

Part of a Broader Trade Understanding

The tariff rollback is part of a wider interim trade arrangement between India and the US. The framework was announced after a recent phone conversation between US President Donald Trump and Prime Minister Narendra Modi.

Under this understanding, India plans to purchase goods worth around $500 billion from the US over the next five years. The proposed imports span sectors such as energy, aircraft and components, technology products, precious metals and coking coal.

Changes in Overall Tariff Structure

As part of the same arrangement, the US is expected to bring down reciprocal tariffs on Indian goods to about 18%. Earlier, cumulative duties had pushed effective tariff rates on certain products close to 50%.

Several categories—including generic pharmaceuticals, gems and diamonds, and aircraft parts—are expected to see duties reduced to zero. India will also receive tariff quotas for specific items such as automobile components and generic medicines.

Additional Trade Commitments

The agreement also includes the removal of US tariffs on selected aircraft and aircraft parts. In exchange, India has agreed to address non-tariff barriers affecting American agricultural and food products.

Officials from both sides indicated that further discussions will be required to resolve remaining trade issues, according to media reports.

Summary

The US has removed the additional 25% tariff on certain Indian goods after India committed to halting Russian oil imports. The move is part of a broader interim trade framework aimed at easing tariff barriers and expanding bilateral trade, including India’s planned $500 billion purchase of US goods over five years. While several sectors are set to benefit from lower or zero duties, further negotiations are expected to address outstanding trade concerns.

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