India Gains Advantage as US Reduces Tariffs on Imports

New Delhi, February 3: Following the United States’ decision to lower tariffs on Indian products to 18%, India is poised to gain a significant edge in global export competition. With this new tariff structure, India has entered the category of countries with lower tariffs compared to several major exporting economies.

Under the current tariff regime, the US imposes an 18% tariff on India, while Indonesia faces a 19% tariff, Vietnam and Bangladesh are at 20%, and China is subjected to a 34% tariff. This positions India favorably against its Asian export competitors.

On Monday, the White House announced that the additional 25% tariff related to Russian oil would be entirely removed, contingent upon India’s agreement to halt its purchase of Russian crude oil. This decision followed a phone conversation between President Donald Trump and Prime Minister Narendra Modi.

A White House official stated, “The 25% tariff on Russian oil is being lifted as part of the agreement with India to cease its Russian oil purchases.”

President Trump shared on the social media platform ‘Truth Social’ that, under this agreement, the reciprocal tariff for the US will decrease from 25% to 18%. He described this as a significant shift in bilateral trade relations tied to energy cooperation and geopolitical objectives.

According to Trump, the two leaders discussed various issues, including trade, the Russia-Ukraine conflict, and energy supply. He claimed that Prime Minister Modi agreed to stop purchasing Russian oil and to increase oil imports from the US and potentially Venezuela.

Prime Minister Modi expressed his satisfaction on the social media platform ‘X’, stating, “I am pleased to know that ‘Made in India’ products will now face a reduced tariff of 18%.”

He emphasized that collaboration between the world’s two largest economies and democracies benefits people and opens new avenues for cooperation.

Senior US officials noted that the additional 25% tariff was directly linked to India’s purchases of Russian oil, which has now been removed following New Delhi’s commitment. This decision reflects the US strategy of aligning trade policy with energy and geopolitical goals.

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