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. The total tariff on India will now be 18%, US Ambassador to India Sergio Gor confirmed. This move is expected to provide relief to Indian businesses and exporters who were facing the brunt of the high tariffs.
The story goes back to last year when US President Donald Trump 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 American goods, while the penalty tariff was specifically targeted at India’s decision to buy oil from Russia, despite US sanctions on the country.
However, in a recent development, Trump has decided to remove the 25% penalty tariff, apart from lowering the reciprocal tariff from 25% to 18%. This move is seen as a significant concession to India, which has been trying to negotiate a better trade deal with the US.
The removal of the penalty tariff is expected to benefit Indian businesses, particularly those in the energy sector. India is one of the largest importers of oil in the world, and a significant portion of its oil imports come from Russia. The penalty tariff had made it expensive for Indian companies to buy oil from Russia, which had resulted in higher costs for consumers.
The reduction in the reciprocal tariff from 25% to 18% is also expected to provide relief to Indian exporters. Many Indian products, such as textiles, pharmaceuticals, and agricultural products, face high tariffs in the US market. The lower tariff will make Indian products more competitive in the US market, which could lead to an increase in exports.
The US Ambassador to India, Sergio Gor, confirmed the development in an interview with NDTV. “The total tariff on India will now be 18%,” he said. “We have removed the 25% penalty tariff, and the reciprocal tariff has been lowered from 25% to 18%.”
The move is seen as a positive development for India-US trade relations. The two countries have been negotiating a trade deal for several years, but the talks have been stalled due to disagreements over tariffs and other issues. The removal of the penalty tariff and the reduction in the reciprocal tariff could help to break the impasse and pave the way for a new trade deal.
India has been trying to diversify its oil imports in recent years, but Russia remains one of its largest suppliers. The country has also been trying to negotiate a waiver from the US sanctions on Russia, but so far, it has not been successful.
The removal of the penalty tariff is also seen as a recognition of India’s strategic importance in the region. India is a key player in the Indo-Pacific region, and the US has been trying to strengthen its ties with the country. The move could help to improve relations between the two countries and pave the way for greater cooperation on trade and security issues.
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 provide relief to Indian businesses and exporters. The reduction in the reciprocal tariff from 25% to 18% is also expected to make Indian products more competitive in the US market. The move is seen as a positive development for India-US trade relations and could help to break the impasse in the trade talks between the two countries.
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