President Donald Trump and Indian prime minister Narendra Modi announced a new trade agreement that sharply reduces US tariffs on Indian goods to 18% from much higher levels, while scrapping extra duties linked to India’s previous purchases of Russian oil. In return, India is said to boost imports of US goods, including petroleum, aircraft, defence equipment, and pharmaceuticals, with a target of around $500 billion over several years. The pact comes after months of tension that saw tariffs and disputes strain relations, as Trump viewed India’s purchases of Russian crude a means of financing Russia’s war against Ukraine.

Strategically, the deal is meant to reset fractured ties between the two major democracies and signal closer cooperation in trade and supply chains. If India follows through on shifting some of its oil purchases from Russia toward the United States and other sources, this could alter global crude flows on tanker routes by redirecting volumes that had been bound for India from the Black Sea and Russia’s Far East toward new suppliers and loading points, with effects on freight patterns and tanker demand.