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US President Donald Trump announced a cut in reciprocal tariffs on Indian imports from 25% to 18%, while also removing 25% tariffs on Russian oil. The move comes amid global trade shifts and rising inflation in the US. PM Narendra Modi welcomed the decision, highlighting its benefits for Indian exporters and industries.
Trump Softens Stance Amid Global Pressures
New Delhi: US President Donald Trump has announced a reduction of the 25% reciprocal tariff imposed on India to 18%. US officials also stated that the 25% tariff imposed on oil imported from Russia will also be removed. With this decision, India joins the list of countries on which the US imposes tariffs of less than 20%. Prime Minister Narendra Modi welcomed the move, calling it a major boost for Indian industry and exporters.
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Experts believe that several reasons are behind Trump's U-turn:
Pressure on US Inflation: Indian products had become more expensive due to tariffs, increasing the burden of prices on American citizens.
Europe and India Trade Deals: The major trade deal between Europe and India has left the US feeling isolated on the global stage.
Supply from Venezuela instead of Russian oil: The US wants India to purchase Venezuelan oil instead of Russian oil.
Making India an Alternative to China: The US wants to promote India to counter China's growing global share.
India's Importance in Global Supply Chain: India's growing export potential and contribution to the global supply chain are important to the US.
The "Mother of All Deals" between India and the European Union has opened access to a market of 2 billion people. Europe has also reduced tariffs on Indian products. Furthermore, talks are progressing between India and Canada on new deals in uranium, crude oil, and artificial intelligence.
US Cuts Tariffs on Indian Goods from 25% to 18% After Trump–Modi Talks
Prime Minister Modi wrote on Twitter that he was happy to speak with his friend Trump and that Made in India products will now be subject to an 18% tariff. Trump also said that India has agreed to waive tariffs on Russian oil and to purchase oil from the US/Venezuela.
India previously faced a 50% tariff, which hurt exporters of textiles, footwear, and engineering goods. Experts say this new tariff reduction will provide relief to Indian industries and exporters and strengthen their competitive position in the global market.
