US cuts tariffs on India as it stops buying Russian oil
US President Donald Trump said he has agreed to a trade deal that would reduce US tariffs on Indian goods from 50 percent to 18 percent in exchange for India reducing trade barriers, halting purchases of Russian oil and instead buying oil from the US and potentially Venezuela.
In his statement on social media after his meeting with Indian Prime Minister Narendra Modi, Trump said, “Out of friendship and respect for Prime Minister Modi and at his request, we have agreed to a Trade Agreement between the United States and India, effective immediately; under this agreement, the United States will reduce the Mutual Tariff from 25 percent to 18 percent.” he said.
The United States has canceled a 25 percent punitive duty on all imports from India for purchases of Russian oil added on top of a 25 percent “reciprocal” duty rate, a White House official told Reuters.
Trump added that Modi has also committed to purchasing more than US$500 billion ($720 billion) worth of US energy, technology, agriculture and other products.
“Great to talk to my dear friend President Trump today. I am pleased that Made in India products will now have a discounted tariff of 18 percent,” Modi said in a social media post on X.
“Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.”
US-listed stocks of leading Indian companies rebounded on this news.
IT consultancy firm Infosys rose 3.53 percent in afternoon trading, consultancy Wipro rose 7.0 percent, HDFC Bank rose 3.4 percent and iShares MSCI India exchange-traded fund rose 3.3 percent.
Trump on Saturday said a potential deal would be reached for India to buy Venezuelan oil after the United States captured Venezuelan President Nicolas Maduro in a military raid in early January.
The deal comes after months of tense trade negotiations between the world’s two largest democracies.
Last August, Trump doubled tariffs on imports from India to 50 percent to pressure Indian companies to stop buying Russian oil, and earlier this month he said the rate could rise again if he did not restrict their purchases.
The purchase of Venezuelan oil will help India, the world’s third-largest oil importer, replace some of the Russian oil it has purchased.
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