President Trump announced yesterday that the U.S. and India have agreed to a bilateral trade deal under which the U.S. will cut tariffs on imports from India from 50% to 18%. The new rate is effective immediately, and it applies broadly across Indian imports, including castor oil products and derivatives widely used in grease and lubricant products.

The tariff rate was lowered after India promised to stop buying crude oil from Russia and purchase U.S., and potentially Venezuelan, energy products at much higher volumes.

Last summer President Trump levied a 25% reciprocal tariff on Indian goods, citing long-standing trade imbalances and India’s historically higher tariff levels compared to the U.S. Then, a month later, the president imposed an additional 25% punitive tariff on Indian goods, specifically targeting the country’s continued purchases of Russian oil and energy, arguing that these purchases help finance Russia’s war in Ukraine. This brought the total tariff rate since last August on castor oil products and derivatives to 50%.

Yesterday’s agreement between the two countries marks a major shift in trade policy and a de-escalation of trade and tariff tensions with India. ILMA had sought to reduce or eliminate the punitive 50% tariff on castor oil products and derivatives because India supplies nearly 97% of U.S. castor oil market demand.

Implementation details and legal formalities are expected to follow as both governments work to codify the tariff changes and related commitments.