US Removes 25% Tariff on India's Russian Oil Imports, Announces New Trade Deal
In a significant development for bilateral trade relations, US President Donald Trump has reportedly agreed to withdraw the 25% penal tariff imposed on India for its crude oil imports from Russia. According to a Bloomberg report citing a New Delhi–based source, the United States has consented to eliminate this tariff, which was linked to India's procurement of Russian oil.
New Trade Deal and Reduced Tariffs
Simultaneously, India and the United States have announced a comprehensive trade agreement. The Trump administration has decided to lower tariffs on Indian exports to the United States from 25% to 18%. President Trump took to his social media platform, Truth Social, to announce this trade deal, which was later confirmed by Prime Minister Narendra Modi via a post on X (formerly Twitter).
However, the Indian government has not yet officially confirmed all the specific details of the trade deal as shared by President Trump in his announcement.
Immediate Implementation and Economic Commitments
US Ambassador to India Sergio Gor provided further clarity on the matter during a television interview. He confirmed that the final tariff rate for India would be set at 18%, indicating that the 25% penal tariff associated with Russian crude oil imports has indeed been removed. Ambassador Gor emphasized that this 18% tariff rate is effective immediately.
Additionally, he revealed that as part of the agreement, India has committed to purchasing $500 billion worth of American products. This substantial purchase will include US energy resources, coal, technology, and agricultural goods, marking a significant boost to economic cooperation between the two nations.
Background on India's Russian Oil Imports
Russia has emerged as the largest supplier of crude oil to India since the onset of its conflict with Ukraine. The share of Russian oil in India's import basket has surged to nearly 40%. However, recent US sanctions on Russian oil companies had compelled Indian refiners to curtail their purchases of Russian crude, creating economic pressures.
Statements from Leaders
Prime Minister Narendra Modi expressed his enthusiasm about the trade deal in a post on X. He stated, "Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement." Modi highlighted that collaboration between two major economies and democracies benefits their citizens and unlocks vast opportunities for mutual cooperation.
He further acknowledged President Trump's leadership as crucial for global peace, stability, and prosperity, affirming India's full support for his peace efforts and expressing eagerness to enhance their partnership.
Prior to Modi's confirmation, President Trump shared details of their discussion on Truth Social. He wrote, "It was an Honor to speak with Prime Minister Modi, of India, this morning. He is one of my greatest friends and, a Powerful and Respected Leader of his Country." Trump mentioned that their conversation covered various topics, including trade and ending the war between Russia and Ukraine.
According to Trump, Prime Minister Modi agreed to cease purchasing Russian oil and instead increase purchases from the United States and potentially Venezuela. Trump asserted that this move would contribute to ending the war in Ukraine. He detailed the trade deal, noting the reduction of the reciprocal tariff from 25% to 18%, effective immediately, and India's commitment to reduce its tariffs and non-tariff barriers against the US to zero.
Trump also highlighted India's pledge to "BUY AMERICAN" at a significantly higher level, encompassing over $500 billion in US energy, technology, agricultural, coal, and other products. He concluded by praising the strengthened relationship between the two nations and their shared ability to achieve tangible results.
