Trump removes penalty tariff imposed on India over Russia oil purchase
In a significant development, the United States has announced the removal of the penalty tariff imposed on India over its purchase of Russian oil. This decision was confirmed by US Ambassador to India, Sergio Gor, who stated that the total tariff on India will now be 18%. This move is expected to have far-reaching implications for the trade relations between the two countries.
To recall, US President Donald Trump had last year imposed a 25% reciprocal tariff on India, in addition to an extra 25% as a penalty over India’s purchase of Russian oil. The reciprocal tariff was imposed in response to India’s tariffs on certain US goods, while the penalty tariff was specifically targeted at India’s decision to purchase oil from Russia, despite the US sanctions on Russian energy exports.
The removal of the 25% penalty tariff, apart from lowering the reciprocal tariff from 25% to 18%, is a welcome move for India. The new tariff structure will provide a significant relief to Indian exporters, who were facing higher tariffs on their exports to the US. This decision is also expected to boost trade between the two countries, which has been affected by the ongoing trade tensions.
The US had imposed sanctions on Russian energy exports in response to Russia’s actions in Ukraine. However, India had continued to purchase oil from Russia, citing its energy security needs. The US had viewed India’s decision as a violation of its sanctions, and had imposed the penalty tariff as a result.
The removal of the penalty tariff is a significant concession by the US, and reflects the growing strategic partnership between the two countries. The US has been seeking to strengthen its ties with India, as part of its strategy to counterbalance China’s growing influence in the region. The removal of the penalty tariff is a positive step in this direction, and is expected to further strengthen the bilateral relationship.
The impact of the new tariff structure will be felt across various sectors, including textiles, pharmaceuticals, and engineering goods. Indian exporters in these sectors will benefit from the lower tariffs, and will be able to compete more effectively in the US market. The new tariff structure will also provide a boost to the Indian economy, which has been facing challenges in recent times.
The decision to remove the penalty tariff is also a reflection of the growing diplomatic engagement between the two countries. The US and India have been engaged in talks to resolve their trade differences, and the removal of the penalty tariff is a significant outcome of these talks. The two countries have also been discussing a range of other issues, including defense cooperation, counter-terrorism, and energy security.
In conclusion, the removal of the penalty tariff imposed on India over its purchase of Russian oil is a significant development, with far-reaching implications for the trade relations between the two countries. The new tariff structure will provide a boost to Indian exporters, and will further strengthen the bilateral relationship. As the US and India continue to engage on a range of issues, the removal of the penalty tariff is a positive step in the right direction.
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