AsianFin -- India is reportedly closer to a trade deal to cut its imports of Russian oil and lower tariffs imposed by the Trump administration.
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The upcoming trade agreement could slash U.S. tariffs on Indian exports to around 15% to 16% from the current 50%, Indian news media outlet Mint on Tuesday cited people familiar with the matter. In return, India is likely to gradually scale down imports of Russian oil, which now marks up about 34% of India’s oil purchases, according to the local report.
Besides energy, agriculture is reported to be another key area under negotiation. Washington and New Delhi are said to discuss India’s greater market access for non-genetically modified corn and soybean from the U.S., though dairy and other sensitive issues remain unresolved.
New Delhi is also said to be considering raising its import quota for non-genetically modified U.S. corn even with a import duty of 15%, while pushing for a mechanism under which both sides can revisit tariffs and market access over time.
The deal could be announced at the Association of Southeast Asian Nations (ASEAN) summit later this month during a meeting between U.S. President Donald Trump and Indian Prime Minister Narendra Modi.
Trump on August 6 signed an executive order imposing an additional 25% tariff on imports from India over Russian oil purchase. The new tariffs entered into effect 21 days after announcement of the order, which effectively raised tariffs imposed by the U.S. on Indian goods to 50% in August. India accordingly became one of the countries facing the highest U.S. tariffs that month.
Trump last week said Modi told him the Indian government will halt purchases of sanctioned Russian oil. Trump acknowledged India can not stop oil shipments immediately. He said the halt will be “a little bit of a process, but the process is going to be over with soon.” He didn’t provide an exact timetable, while seeing India’s oil purchase will restart once Moscow’s war in Ukraine ends.
“If India doesn’t buy [Russian] oil, it makes [ending the war] much easier,” Trump said on on October 15. “They assured me within a short period of time, they will not be buying oil from Russia, and they will go back to Russia after the war is over.”
India's foreign ministry said a day ago that it is unaware of any conversation between the two heads of state around New Delhi reducing its Russian oil buys and stepping up its purchase of US crude oil and natural gas.
“To the best of our knowledge, I am not aware of any conversation between PM Modi and President Trump yesterday,” Randhir Jaiswal, a spokesman for the Ministry of External Affairs, told reporters at a briefing in New Delhi on October 16. In a statement earlier that day, Jaiswal didn’t confirm that India is complying with Trump’s demands, although said that New Delhi is working to deepen energy ties with the US.
Trump on Sunday promised to maintain “massive” tariffs on imports from India until it stops purchase of Russian oil. "I spoke with Prime Minister Modi of India, and he said he's not going to be doing the Russian oil thing," Trump told reporters on board Air Force One.
"If they want to say that, then they'll just continue to pay massive tariffs, and they don't want to do that," Trump replied when asked about New Delhi’s denying the telephone conversation took place.
Trump on Tuesday reiterated a phone call with Modi, stating the prime minister assured him that the Indian government would reduce buying Russian oil. “He’s not going to buy much oil from Russia. He wants to see that war end as much as I do. He wants to see the war end with Russia, Ukraine, and as you know, they’re not going to be buying too much oil,” Trump said aboard Air Force One. He repeated his threat of “massive” tariffs if India didn’t do so.
Modi in a post on X on Wednesday confirmed a phone call with Trump. He said he hoped the two countries continue to “stand united against terrorism in all its forms,” without mentioning India’s stance on Russian oil.
