US President Donald Trump on Friday signed an executive order removing the extra 25 per cent tariff that had been imposed on all imports from India. The tariff was added earlier because India continued to buy oil from Russia, something the US administration had strongly objected to. The White House confirmed the decision, saying the additional duty linked to India’s Russian oil purchases has now been withdrawn.

Trump removes 25 percent tariff on Indian imports linked to purchase of Russian oil
This move comes just days after India and the United States finalised a long-pending trade deal, bringing an end to nearly a year of trade tensions between the two countries. In the past, Trump had repeatedly accused India of helping Moscow by continuing to buy Russian oil. He had said that these purchases indirectly supported Russia’s military actions in Ukraine, even though Europe and US kept buying the Russian oil and energy.

The US had imposed a special 25 per cent duty on Indian imports. This penalty was placed on top of an existing 25 per cent “reciprocal” tariff, sharply increasing the cost of Indian goods entering the US market. A White House official had earlier told Reuters that the US planned to withdraw this punitive tariff, specifically the one linked to India’s Russian oil imports.

India-US trade deal: Interim trade agreement released
On Friday, the United States and India also released a framework for an interim trade agreement. In a joint statement, both countries said the framework confirms their commitment to keep negotiating toward a broader bilateral trade agreement. “The United States and India will promptly implement this framework and work towards finalizing the Interim Agreement with a view to concluding a mutually beneficial BTA consistent with the roadmap agreed in the Terms of Reference,” the statement said.

Officials from both sides said this interim step is meant to pave the way for a full trade deal. According to Indian Trade Minister Piyush Goyal, the two countries are expected to sign a formal trade deal in March. After that, India will lower tariffs on US goods as part of the agreement.

How India-US trade deal changed everything
Earlier this week, Trump announced a trade agreement with India under which US tariffs on Indian goods were cut sharply, falling to 18 per cent from 50 per cent. In return, India agreed to halt purchases of Russian oil and lower several trade barriers. Trump announced the deal on social media after speaking with Indian Prime Minister Narendra Modi. India has been one of the biggest buyers of Russian oil, meeting around 90 per cent of its oil import needs through long-term arrangements.

With the extra tariff now removed and a trade framework in place, both countries appear to be turning the page on a difficult phase in their economic relationship. According to a Reuters report, India imported about 1.2 million barrels per day of Russian oil in January. This figure is expected to fall to around 1 million barrels per day in February and about 800,000 barrels per day in March.