The 50% tariff imposed by the US on India could be significantly eased, and the additional 25% tariff imposed by Trump on Russian oil purchases could be lifted. Chief Economic Advisor V. Anantha Nageswaran expressed this hope on Thursday. He said that the US could soon remove additional tariffs on Indian goods and reduce the reciprocal tariff to 10 to 15%. The CEA also hinted at progress towards an India-US trade deal.
A Solution will be found in 8-10 weeks.
Speaking at an event in Kolkatta, CEA Nageswaran said that he expects the tariff issue to be resolved within the next 8 to 10 weeks. He said, “I am confident that a solution to at least the 25% extra tariff will be found in the next few months.” According to a report published in Business Today, Nageswaran further said that there are signs of progress in trade agreement negotiations between the two countries, which could ease pressure on Indian exports worth approximately $50 billion.
Why did Trump impose a 25% extra tariff?
It’s worth noting that the US initially imposed a 25% reciprocal tariff on India, but in August, India was imposed an additional 25% tariff as a penalty, citing India’s purchase of Russian oil as a means of funding Putin’s campaign in the Ukrainian war. This increased India’s total tariff to 50%, making it one of the countries facing the highest trump tariffs, along with Brazil. In his address, Nageswaran stated that extensive discussions are underway between the US and Indian governments to resolve all underlying issues.
What progress has been made on the India-US trade deal?
The trade deal between India and the US had been stalled over issues including agriculture and dairy products, and negotiations stalled after Trump’s additional tariffs. However, recently, US President Trump, calling PM Modi a good friend on the social media platform TruthSocial, spoke of the successful conclusion of the trade deal.
After this, earlier this week, US Chief negotiator Brendan Lynch came to New Delhi for the sixth round of talks on the trade deal and had a nearly 7-hour long discussion with India’s chief trade negotiator Rajesh Aggarwal.
55% of goods under high tariffs
According to the report, approximately 55% of India’s exports to the US are currently subject to Trump’s high tariffs. The sectors most affected include textiles, chemicals , marine foods, gems and jewellery, and machinery. These are significant because they are a key part of India’s labour-intensive export economy. As a result of the impact of the tariffs , exports to the US fell to $6.87 billion in August, the lowers level in 10 months.
Source: aaj tak
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