Trump Removes Penalty Tariff Imposed on India over Russia Oil Purchase
In a significant development, US President Donald Trump has announced the removal of the 25% penalty tariff imposed on India over its purchase of Russian oil. This move comes as a welcome relief to the Indian government, which had been facing increased tariffs on its exports to the United States. According to US Ambassador to India Sergio Gor, the total tariff on India will now be 18%, marking a substantial reduction from the earlier rates.
Last year, Trump had imposed a 25% reciprocal tariff on India, in addition to an extra 25% penalty tariff, citing India’s decision to purchase oil from Russia. The move had been seen as a retaliatory measure by the US, which had been seeking to punish India for its refusal to comply with US sanctions on Russia. However, with the removal of the penalty tariff, the total tariff on India will now be 18%, as confirmed by Ambassador Gor.
The decision to remove the penalty tariff is expected to have a positive impact on India-US trade relations, which had been strained in recent months. The Indian government had been lobbying hard to get the tariffs removed, and the latest move is seen as a significant victory for New Delhi. The reduction in tariffs is expected to boost Indian exports to the US, which had been facing significant challenges due to the high tariffs.
The US had imposed the tariffs on India under Section 301 of the US Trade Act, which allows the US President to impose tariffs on countries that are deemed to be engaging in unfair trade practices. The US had accused India of imposing high tariffs on US goods, and had sought to pressure New Delhi into reducing its tariffs. However, with the removal of the penalty tariff, it appears that the US has taken a more conciliatory approach, seeking to improve trade relations with India.
The removal of the penalty tariff is also expected to have a positive impact on the Indian economy, which had been facing significant challenges due to the COVID-19 pandemic. The reduction in tariffs is expected to boost exports, which had been hit hard by the pandemic. The Indian government has been seeking to boost exports, and the latest move is expected to provide a significant fillip to the country’s export sector.
The development is also significant in the context of India’s relations with Russia. The US had imposed sanctions on Russia over its actions in Ukraine, and had sought to pressure India into complying with the sanctions. However, India had refused to comply, citing its long-standing ties with Russia. The removal of the penalty tariff suggests that the US has recognized India’s strategic interests, and is seeking to improve relations with New Delhi.
The move is also seen as a significant development in the context of the ongoing trade tensions between the US and other countries. The US has been seeking to impose tariffs on several countries, citing unfair trade practices. However, the removal of the penalty tariff on India suggests that the US is willing to engage in dialogue and seek mutually beneficial solutions.
In conclusion, the removal of the penalty tariff imposed on India over its purchase of Russian oil is a significant development that is expected to have a positive impact on India-US trade relations. The reduction in tariffs is expected to boost Indian exports to the US, and provide a significant fillip to the country’s export sector. The move is also seen as a significant victory for the Indian government, which had been lobbying hard to get the tariffs removed. As the two countries seek to improve trade relations, the removal of the penalty tariff is a welcome development that is expected to have far-reaching consequences.
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