United States President Donald Trump on Friday removed the additional 25% punitive tariff on Indian goods imposed for New Delhi’s purchase of Russian oil, bringing the effective US tariff rate on Indian imports down to 18%.
Indian goods had been facing a combined US tariff rate of 50%, including a punitive levy of 25% imposed in August for buying Russian oil.
On Monday, Trump announced that the US would reduce tariffs on Indian goods to 18% from 25% after the two countries agreed to an interim trade deal.
An executive order issued by the White House on Friday said that the punitive tariff was being withdrawn as India has committed to stop “directly or indirectly importing Russian Federation oil”.
It added that India has also “represented that it will purchase United States energy products…and…committed to a framework with [the US] to expand defence cooperation over the next 10 years”.
The order also said that the punitive tariffs may be reinstated in case the US secretary of commerce finds that India has resumed importing Russian oil.
In such a situation “the secretary of state…shall recommend whether and to what extent I [Trump] should take additional action as to India, including whether I should reimpose the additional ad valorem rate of duty of 25% on imports of articles of India”, the order said.
The US has repeatedly alleged that India’s purchases of Russian oil helped fuel the war in Ukraine, while New Delhi has maintained that its oil purchases were aimed at ensuring its own energy security.
Separately, on Friday, the US and India issued a joint statement outlining the framework for the interim trade deal between the two countries.
In addition to confirming the reduction of US tariff on Indian goods to 18%, the statement said that New Delhi would “eliminate or reduce tariffs” on all industrial goods and a range of food agricultural products from Washington.
These include dried distillers’ grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits.
The statement added that both countries would provide each other preferential market access “in sectors of respective interest on a sustained basis”.
Union Commerce Minister Piyush Goyal shared the framework on social media and said that the interim agreement would “open a $30 trillion market for Indian exporters, especially [micro, small and medium entreprises], farmers and fishermen”.
He added: “The increase in exports will create lakhs of new job opportunities for our women and youth.”
After the interim trade deal was announced on Monday, Opposition parties had expressed concerns that the interests of farmers were jeopardised in the deal.
On Tuesday, Congress leader Rahul Gandhi claimed that Prime Minister Narendra Modi had “sold out” the “sweat and blood” of the country’s farmers by buckling under pressure from the US to finalise a trade deal.
On Wednesday, Goyal said in Parliament that interests of sensitive sectors such as agriculture and dairy will be protected under the trade deal between India and US.
The US has also protected sectors that it considers sensitive, the Union minister had said at the time.
On Tuesday, Goyal said that the interests of Indian farmers were safeguarded and their protection was key during the course of negotiations for the deal.
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