U.S.-India Trade: Trump Removes India's 25% Russia-Related Tariff

President Donald Trump removed the extra 25% tariff tied to India’s purchases of Russian oil, effective Feb. 7, and the U.S. also cut a reciprocal levy that brings the effective tariff rate on Indian goods to 18%.

President Donald Trump issued an executive order eliminating the additional 25% tariff the United States had imposed on Indian goods over India’s purchases of Russian oil. The order and a separate joint statement say the tariff elimination took effect at 12:01 a.m. Washington time on February 7. The U.S. also announced a cut to a reciprocal levy, reducing the effective tariff on Indian products to 18%. The moves follow a trade agreement announced after a phone call between Trump and Indian Prime Minister Narendra Modi. Key facts: - The executive order states India committed to stop directly or indirectly importing Russian Federation oil, to purchase U.S. energy products, and to a framework to expand defense cooperation over the next 10 years, according to the text released by the White House. - The U.S. said it would cut a separate reciprocal levy on Indian products, bringing the effective tariff rate to 18% from a previously higher level. - India's Ministry of Commerce did not confirm the U.S. statement that India will halt purchases of Russian oil, as reported in the article. - The report notes India’s exports had faced tariffs as high as 50% since last summer, the highest charge among major Asian trading partners. - The article says India agreed to buy $500 billion of American products and to remove trade barriers on U.S. goods, and U.S. Trade Representative Jamieson Greer said implementing those commitments will require further work. Summary: The tariff removal is described as the first step toward implementing the recently announced trade deal and reduces a prominent source of bilateral trade tension. Officials say additional work is required to carry out commitments on energy purchases, market access and defense cooperation. Implementation details and timelines are undetermined at this time.