US President Donald Trump on Friday moved to lift an additional 25 percent tariff imposed on Indian goods over New Delhi’s purchases of Russian oil, formalizing a trade deal announced earlier this week and easing months of bilateral tensions on energy policy.
According to an executive order signed by Trump, India has committed to stopping the direct or indirect import of oil from the Russian Federation. The order said New Delhi has also agreed to increase purchases of US energy products and has committed to a framework with Washington to expand defense cooperation over the next 10 years. The additional 25 percent duty will be removed at 12:01 am Eastern Time on Saturday.
The move follows Trump’s announcement of a broader trade agreement under which the United States will reduce so-called reciprocal tariffs on Indian products to 18 percent, down from 25 percent. The reduction is part of an interim framework aimed at paving the way for a more comprehensive bilateral trade agreement between the two countries.
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The White House said the agreement also includes the removal of tariffs on certain aircraft and aircraft parts, as outlined in a separate joint statement released on Friday. The statement added that India plans to purchase $500 billion worth of US goods over the next five years, including energy products, aircraft and parts, precious metals, technology items, and coking coal.
The deal marks a sharp reduction in US tariffs on Indian products, which had reached as high as 50 percent late last year. It also signals a thaw in relations strained by Washington’s criticism of India’s oil imports from Russia, which the US has argued help fund the war in Ukraine.
Analysts said the revised tariff structure could give Indian exporters a modest advantage in the US market compared with regional competitors facing duties of around 19 to 20 percent. The agreement also restores momentum in ties between Trump and Prime Minister Narendra Modi, whom the US president has previously described as a close friend.
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