Trump Unveils India Trade Pact: Tariffs Swapped for Russian Oil Ban

In a significant shift for global trade and energy markets, President Donald Trump announced on Monday that the United States has reached a bilateral agreement with India. The deal involves a reduction of US tariffs on Indian goods from 50% to 18%, conditional on New Delhi ceasing its purchases of Russian crude oil.

Energy Realignment

This agreement marks a direct strike against Russia's “shadow fleet” oil economy. Since the onset of sanctions, India had become a primary consumer of discounted Russian seaborne crude. By pivoting India away from Moscow, Washington aims to squeeze the Kremlin's revenue streams further.

To plug the energy gap, India has committed to a massive $500 billion procurement plan, which includes purchasing US energy products and potentially sourcing oil from Venezuela.

Market Reaction & Technicals

• Crude Oil (WTI): Prices remain vulnerable near $61.75 as the market digests the potential redistribution of supply.
• Emerging Markets: Indian assets and the Rupee (INR) are in focus, with the tariff reduction providing a potential boost to exporters, though replacing Russian oil poses an risk.
• Geopolitics: The move signals a more aggressive US stance on enforcing sanctions through economic incentives.

Simultaneously, the Trump administration announced the creation of a Critical Mineral Reserve, supported by $10 billion in EXIM Bank financing, aiming to secure supply chains for strategic materials independent of Chinese influence.