US-India tariff deal tied to India ending Russian oil purchases

BBC
BBC 47m
President Donald Trump said the US will cut tariffs on Indian goods to 18% from 25% and drop an extra 25% penalty after India agreed to stop buying Russian oil and reduce trade barriers to zero.
US-India tariff deal tied to India ending Russian oil purchases
A What happened
Trump said he reached an agreement with Prime Minister Narendra Modi after a phone call covering trade and the Russia-Ukraine war. Under the terms Trump described, the US tariff rate on goods from India would be reduced to 18% from 25%, and a separate 25% tariff penalty linked to India’s continued purchases of Russian oil would be removed. Trump also said India would reduce tariffs and non-tariff barriers to zero, stop buying Russian oil, and increase purchases from the US, including energy; he additionally claimed India would buy more than $500bn of US goods.

Why it matters

  • US sanctions-style leverage shifts to trade terms: Linking tariff relief to ending Russian oil purchases uses market access as a compliance tool, tightening constraints on India’s energy sourcing choices.

  • Tariff rollback changes near-term pricing for India-US trade flows: Lower US tariffs and removal of the added penalty reduce the cost burden on Indian exports to the US relative to the prior announced rates.

  • Large stated purchase commitment would reallocate procurement toward US suppliers: A $500bn buying pledge, if executed, would concentrate demand on US exporters across categories cited by Trump, including energy and technology.

Topics

World & Politics International Affairs Business & Markets Energy & Commodities Trade & Tariffs

Read the full article on BBC

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