US Imposes Tariff Reduction on Indian Goods from 50% to 18%

US President Donald Trump Announces Tariff Reduction with India

In a social media post, US President Donald Trump announced that the United States has agreed to reduce tariffs on Indian goods to 18 percent from 50 percent. The move comes after a call with Indian Prime Minister Narendra Modi.

As part of the agreement, India has committed to lowering trade barriers and stopping its purchases of Russian oil. Instead, India will purchase oil from the US and potentially Venezuela. A White House official confirmed that the US is rescinding a punitive 25 percent duty on all imports from India over its purchases of Russian oil.

The deal also includes commitments from Modi to buy more than $500 billion worth of US energy, technology, agricultural, and other products. Trump made the announcement following his call with Modi.

In response to the news, Modi expressed gratitude to Trump on social media, stating that he is “delighted” about the reduced tariff rate. Experts have noted that while the deal may be a breakthrough, it is still unclear whether it constitutes a trade agreement or a tariff reduction.

The agreement follows months of tense trade negotiations between the US and India. In August, Trump doubled duties on imports from India to 50 percent, and earlier this month said the rate could rise again if India did not curb its purchases of Russian oil. The deal comes after India began to slow its oil purchases from Russia in recent months.

The reduction in tariffs is seen as a positive development for Indian markets, which have been affected by US sanctions. Despite the tariff relief, experts caution that India will continue to diversify and de-risk its economy.

Source: Al Jazeera