New Delhi: US President Donald Trump on Tuesday said his administration would be lowering the high tariffs levied against India, offering the first clear indication of resolving the issue that has troubled bilateral ties for the past few months.
Justifying the move, Trump said India faces such high tariffs because of its oil trade with Russia, yet again claiming that New Delhi has “stopped” the purchase. He said his administration was planning on reducing tariffs on India at some point, saying also that Washington is close to a “fair deal” with New Delhi.
“The tariffs are very high on India due to Russian oil, and they (India) have stopped doing the Russian oil very substantially,” Trump told reporters at the White House when asked about trade negotiations with India. “We’re gonna be bringing tariffs down… at some point, we’ll bring them down.” He did not give a timeline.
Fillip to BTA
The US President’s remarks come months after he imposed 25 per cent penal tariffs on Indian goods for New Delhi’s continued purchases of Russian energy. This increased total American tariffs against India to 50 per cent, among the highest in the world. This came into effect August 27. India expects $48.2 billion of its merchandise exports to get impacted by these tariffs.
Trump earlier claimed multiple times that India was going to end its Moscow crude buying.
New Delhi and Washington, meanwhile, continue work on a proposed bilateral trade agreement (BTA), the first tranche of which is targeted for completion soon. The deal aims to more than double bilateral trade to $500 billion by 2030, from the current $191 billion.
Officials said India is awaiting a response from the US on the trade deal, and that another round of talks is not needed at this juncture.
Barclays on Tuesday said India’s goods exports were resilient in the first half of FY26 despite headwinds from trade and tariff uncertainty. It expects the ‘secondary’ 25 per cent tariffs to be waived by the year-end amid reduced purchases of Russian oil.
“At 35.7 per cent effective rate, tariffs on India are sizeably higher than other EM (emerging market) peers, putting India in a disadvantageous position,” Barclays said in a report. “Our analysis of trade data till September suggests reasonable resilience to this shock, culminating from frontloading and diversification of export markets in select goods.”
Steady export growth in goods exempted from US tariffs so far, including telecom and pharma, has also contributed to this resilience.
