Argus News - US Lifts 25% Tariff on India over Russian Oil Imports

New Delhi, Feb 7: The United States has announced to lift an additional 25 per cent tariff that was imposed on India over the country’s purchase of Russian Oil.

This is a crucial step to implement a trade deal, which was announced earlier this week.

An executive order signed by US President Donald Trump says, “India has committed to stop directly or indirectly importing Russian Federation oil.”

Also read: Aircraft Parts to Red Sorghum: Here are Key Terms of India-US Interim Trade Pact

India, on the other hand, has said that it will purchase US energy products. The order mentions that India “has committed to a framework with the US to expand defence cooperation over the next decade.”

The additional 25% US duty will be removed at 12:01 am (Eastern Time) on Saturday.

The order comes just a few days after the US President announced a trade deal to reduce tariffs on India. Trump claimed that Prime Minister Narendra Modi had promised to stop purchasing Russian oil over the war in Ukrain.

The trade pact will also see US reducing “reciprocal” levies on Indian goods to 18%, down from 25%. The rollout of this tariff cut is yet to come.

According to a separate joint statement released by the White House, the terms of the pact also include the removal of US duty on certain aircraft and parts, adding that India intends to buy $500 billion of US energy products, aircraft and parts, tech products, precious metals, as well as coking coal over the next five years.

The deal has eased months of tensions over India's Russian oil purchases, which Washington termed as “a fund” for the conflict — Russia-Ukraine war — US is trying to end.

According to Wendy Cutler, senior vice president at the Asia Society Policy Institute, the reduced tariff of 18% gives Indian exporters a slight edge in the US market over their competitors, who have comparatively higher tariffs.