Mint has reported that India and the United States are close to finalising a long-pending Trade Agreement.
The deal could end the tariff tensions that began when the Trump Administration imposed 50% tariffs on Indian exports for allegedly supporting the Russia-Ukraine war through continued Russian fuel purchases.
Currently, Russia supplies about 34% of India’s crude oil imports. In comparison, around 10% of India’s oil and gas needs, by value, come from the US.
The US accused India of profiteering from cheap Russian fuel and added a 25% punitive levy on Indian exports, in addition to the 25% reciprocal tariffs India had introduced in April.
According to Mint sources, India has agreed to gradually reduce imports of Russian oil. The country may also permit more non-genetically modified (GM) American corn and soymeal into the market.
With China cutting US corn imports drastically from $5.2 billion in 2022 to just $331 million in 2024 the US is actively seeking new buyers. India’s growing demand from poultry feed, dairy, and ethanol sectors makes it a potential destination.
The US is also pushing for tariff reductions on its dairy exports, including premium cheese products.
If the reports are accurate, India appears to be meeting most of the US’s key demands. Critics, however, question why the government waited so long, allowing tariff pressures to harm the domestic economy.
While India had previously insisted it would not halt Russian oil imports, it seems the government has softened its stance to secure trade stability.
Officials suggest that GST reforms were introduced earlier in anticipation of prolonged tariff issues, helping the economy stay afloat.
Once this deal is finalised, it could provide a significant boost to the economy. Lower tariffs, coupled with GST reforms, would likely increase purchasing power and reduce import costs.
US President Donald Trump and Prime Minister Narendra Modi are expected to meet at the ASEAN Summit to finalise the agreement. However, neither leader has yet confirmed participation in the summit.
