US President Donald Trump has taken a decisive step to strengthen economic ties with India by lifting a 25 per cent tariff on Indian goods, which was imposed due to New Delhi's purchases of Russian oil. 

This move implements a freshly announced trade deal and signals a thaw in bilateral relations.

The executive order, signed on Friday, explicitly states that India has committed to halting all direct and indirect imports of oil from the Russian Federation. This pledge addresses longstanding US concerns over India's energy dealings amid the Ukraine conflict.

In tandem, New Delhi has affirmed its intent to ramp up purchases of US energy products. The order highlights India's recent commitment to a 10-year framework for expanding defence cooperation with the United States, underscoring deeper strategic alignment.

The tariff removal takes effect at 12:01 am Eastern Time on Saturday, providing immediate relief to Indian exporters facing elevated duties. This follows months of escalating trade tensions, with US levies on Indian products peaking at 50 per cent late last year.

Trump's announcement earlier this week framed the deal as a direct outcome of discussions with Prime Minister Narendra Modi, whom he has called one of his greatest friends. Modi reportedly promised to cease Russian oil imports, paving the way for tariff reductions.

Under the pact, the US will slash so-called reciprocal tariffs on Indian goods to 18 per cent from 25 per cent, although the full rollout of this cut remains pending. This adjustment positions Indian products competitively in the US market.

A separate White House joint statement on Friday detailed further concessions, including the elimination of tariffs on specific aircraft and parts. These measures aim to boost cross-border trade in high-value sectors.

India has outlined ambitious procurement plans, intending to buy $500 billion worth of US energy products, aircraft and parts, precious metals, tech products, and coking coal over the next five years. This commitment could reshape global energy and defence supply chains.

The deal alleviates pressures stemming from India's Russian oil imports, which Washington views as inadvertently funding Moscow's war efforts in Ukraine. It marks a pivot from confrontation to collaboration in US-India economic relations.

Trade experts, such as Wendy Cutler, senior vice president at the Asia Society Policy Institute, note that the 18 per cent tariff rate gives Indian exporters a marginal advantage over regional rivals facing duties of 19 to 20 per cent. This could enhance India's market share in the US.

Restored warmth between Trump and Modi revives a personal rapport that has underpinned key diplomatic initiatives. The agreement not only eases immediate trade barriers but also lays groundwork for sustained partnership.

For India's defence sector, the 10-year cooperation framework promises expanded joint programs, potentially accelerating technology transfers and co-development in aerospace and military hardware. This aligns with New Delhi's push for indigenous manufacturing.

Energy diversification forms another pillar, as India shifts from Russian crude towards US supplies. Such a transition could stabilise global oil markets while bolstering America's energy export ambitions.

Aircraft tariff exemptions will benefit Indian aviation firms and US manufacturers alike, fostering deals for commercial and defence planes. Precious metals and coking coal purchases further diversify the trade basket.

Tech products under the deal open avenues for semiconductor and electronics collaboration, vital amid global supply chain realignments. India's $500 billion pledge over five years represents a transformative scale-up in bilateral commerce.

Geopolitically, the pact reinforces the US-India strategic axis against shared challenges, including tensions in the Indo-Pacific. It counters narratives of trade discord and projects unity on energy security.

Indian exporters stand to gain from reduced duties, particularly in textiles, pharmaceuticals, and engineering goods previously hit hard. The 18 per cent level offers breathing room amid competitive pressures.

As implementation unfolds, stakeholders will monitor compliance with the Russian oil cessation and US procurement targets. Early signs point to a robust framework for mutual gains.

This development arrives at a pivotal moment, with global trade fragmented by conflicts and protectionism. The US-India deal exemplifies pragmatic diplomacy yielding tangible economic benefits.

Based On AFP Report