Washington — US President Donald Trump said on Monday that he intends to reduce customs duties on goods coming from India to 18%. From 25%This is after Indian Prime Minister Narendra Modi agreed to stop Buying Russian oil.
The move comes after months of Trump pressuring India to do so And reduce its dependence on cheap Russian crude. India has benefited from lower Russian oil prices as much of the world sought to isolate Moscow over its February 2022 invasion of Ukraine.
Trump said India will also begin cutting import taxes on US goods to zero and purchase $500 billion worth of US products.
“This will help end the war in Ukraine, which is raging right now, where thousands of people are dying every week!” Trump said in a post on Truth Social announcing a reduction in tariffs on India.
Modi posted on X that he was “pleased” with the announced tariff reduction and that “Trump’s leadership is vital to global peace, stability and prosperity.”
“I look forward to working closely with him to take our partnership to unprecedented levels,” Modi said.
Trump has had it for a long time Warm relationship with ModiThings have been complicated recently due to the Russian war in Ukraine and trade disputes.
Trump is struggling to fulfill his campaign pledge to quickly end the crisis The war between Russia and Ukraine Since returning to office, he has been reluctant to put pressure on Russian President Vladimir Putin. He simultaneously imposed tariffs without going through Congress to achieve his economic and foreign policy goals.
The announcement of the agreement with India comes at a time when his special envoy, Steve Witkoff and his son-in-law, Jared Kushner Another round of trilateral talks with Russian and Ukrainian officials is expected to be held in Abu Dhabi later this week aimed at finding an end to the war, according to a White House official who requested anonymity to describe the upcoming meeting.
Trump has expressed his belief that targeting Russian oil revenues is the best way to get Moscow to end its nearly four-year war against Ukraine, a view consistent with his devotion to tariffs.
In June, Trump announced that the United States would impose a 25% tariff on goods from India after his administration felt that the country had done too little to narrow its trade surplus with the United States and open its markets to American goods. In August, Trump imposed an additional 25% import tax on Indian products due to its purchases of Russian oil. Determine the combined rate increase at 50%..
With the commitment to stop buying Russian oil and the lower rate, the tariff rate on Indian products could fall to 18%, which is close to the 15% rate imposed on goods from the European Union and Japan, among other countries.
Historically, India’s relationship with Russia has been more about defense than energy. Russia supplies only a small portion of India’s oil but the majority of its military equipment.
But India, in the wake of the Russian invasion, used the moment to buy Russian oil at discounted prices, allowing it to increase its energy supplies while Russia looked to make deals to boost its beleaguered economy and continue to pay the price for its brutal war.
The announced tariff reduction comes days later India and the European Union have reached a free trade agreement This could affect up to two billion people after nearly two decades of negotiations. The agreement would enable free trade in almost all goods between the 27 EU members and India, covering everything from textiles to medicines, and reduce high taxes on imports of European wine and cars.
The agreement between two of the world’s largest markets also reflects a desire to reduce dependence on the United States after Trump’s import tax increase disrupted existing trade flows. While the cost of Trump’s tariffs is largely borne by American businesses and consumers, the taxes could reduce the volume of trade between countries.
In recent months, India has accelerated its efforts to finalize several trade agreements. It signed an agreement with Oman In December, talks on A Dealing with New Zealand.
Trump appeared to hint at a positive call with Modi on Monday morning, as he posted on social media a photo of the two on the cover of a magazine.
When the couple met last FebruaryThe US President said that India will begin purchasing American oil and natural gas. But the talks proved frustrating and the tariffs imposed by Trump last year did little to change India’s initial objections.
While the United States seeks to increase market access and eliminate tariffs on almost all of its exports, India has expressed reservations about opening up sectors such as agriculture and dairy, which employ the bulk of the country’s population to make a living, Indian officials said.
The Census Bureau reported that the United States had a $53.5 billion trade imbalance in goods with India during the first 11 months of last year, meaning it imported more than it exported.
With a population of more than 1.4 billion, India is the world’s most populous country, and is viewed by many government officials and business leaders as a geopolitical and economic counterweight to China.
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Roy reported from New Delhi, India.