India–US trade deal likely this month; tariffs could drop to 15–16%: Report

India and the US are close to finalising a long-anticipated trade deal that could significantly reduce tariffs on Indian exports from the current 50% to around 15–16%, Mint reported on Wednesday, citing three people aware of the discussions. The deal, which could be announced later this month during the ASEAN Summit, is expected to ease months of strain between New Delhi and Washington over trade, energy, and Russia-related sanctions.

According to the report, both sides are negotiating key components involving energy and agriculture. India may agree to gradually reduce imports of Russian oil in return for tariff concessions on exports to the US. The purchases of Russian crude had triggered a 25% tariff on Indian exports, in addition to the 25% reciprocal tariff the US imposed on India. Currently, about 34% of India's crude imports come from Russia, while roughly 10% (by value) of its oil and gas needs are met by the US.

On the agriculture front, India is considering increasing the quota for non-genetically modified (GM) corn and soymeal imports from the US, the report said. Talks are also advancing on permitting imports of non-GM soymeal for both human and livestock consumption. "However, there is still no final clarity on tariff reductions for dairy products, including high-end cheese, even though it is a key demand from the US team," one official told Mint.

At present, the annual quota for American corn imports stands at 0.5 million tonnes, and while the duty on these imports will remain at 15%, New Delhi may allow a higher quota to address domestic demand in the poultry feed, dairy, and ethanol industries. India is also pushing for a mechanism within the trade pact that allows periodic reviews of tariffs and market access.

China's shrinking appetite for US corn has given the negotiations additional momentum. Beijing's imports of American corn dropped sharply—from $5.2 billion in 2022 to just $331 million in 2024—pushing Washington to seek new markets. Overall, US corn exports fell from $18.57 billion to $13.7 billion during the same period, according to trade data cited in the report.

On energy, the Indian side is considering allowing US ethanol and gradually reducing purchases of Russian oil, with the US expected to extend concessions on energy trade in return, another official said, adding that New Delhi may quietly advise state-run oil marketing companies to diversify crude sourcing toward the US.

According to the report, top Indian representatives recently visited Moscow and informed Russian counterparts that India plans to gradually scale down crude imports. US officials have made it clear that President Donald Trump views ending India's purchases of Russian oil as a precondition for the trade deal.

A Bloomberg report dated October 8 noted that the price gap between Russian and benchmark crude has narrowed from over $23 a barrel in 2023 to about $2–2.50 per barrel as of mid-October, making US and Middle Eastern oil more competitive. As a result, India saved about $3.8 billion in FY25 as discounts on Russian crude shrank.