A potential thaw in US-India trade ties may be on the horizon. Washington has hinted it could ease a significant portion of the steep tariffs imposed on Indian goods.
The indication comes amid claims from the US Treasury Secretary that India has sharply reduced its purchases of Russian crude oil. He said the shift could open the door to rolling back at least half of the 50 per cent duties currently in place.
Here’s the good news for India.
In an interview with an American news outlet, US Treasury Secretary Scott Bessent said that India’s decision to scale back imports of Russian oil had created favourable conditions for removing at least half of the 50 per cent tariffs currently levied on Indian exports.
He suggested that 25 per cent of the duties could be rolled back, claimed media reports.
The tariffs had been introduced in two phases. While an initial 25 per cent duty was imposed on India over alleged trade imbalances, an additional 25 per cent levy was later added as a punitive response to New Delhi’s continued procurement of Russian crude, even as the US sought to intensify economic pressure on Moscow.
Bessent said the tariff policy had achieved its intended outcome, stating that Indian purchases of Russian oil had collapsed and indicating that a pathway now existed to remove the duties, even though the tariffs remained in place.
He also claimed that the European Union had refrained from imposing similar tariffs on India because it was seeking to conclude a major trade agreement with New Delhi. In the same remarks, Bessent criticised European countries for buying refined energy products from India, describing the approach as misguided.
Bessent added that India, the world’s third-largest oil importer, had significantly reduced its imports of Russian crude. He said India had begun purchasing Russian oil after the conflict in Ukraine started, but following the imposition of a 25 per cent tariff by President Donald Trump, those purchases had been scaled down and halted.
His comments signal a potential recalibration of the Trump administration’s tough trade posture towards India, even as the two countries have continued engagements at various levels in recent months to work towards a mutually beneficial trade agreement and ease tensions that followed the tariff announcement in August last year.
Recent media reports have indicated that private companies in India have curtailed imports of Russian oil. However, the Indian government has maintained that purchases from Russia are continuing without disruption.
As part of its broader strategy to increase pressure on Moscow, the Trump administration has urged countries, including India, to reduce oil trade with Russia. India has firmly rejected this push, calling the US stance unfair, unjustified and unreasonable, while asserting that its energy decisions are driven by national interest.
India, the world’s third-largest oil importer, became the largest buyer of discounted Russian crude after Western nations distanced themselves from Moscow following Russia’s invasion of Ukraine in February 2022.
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