US President Donald Trump with PM Narendra Modi
Credit: Reuters Photo
New Delhi: The United States will lower the tariff on India “at some point” as the South Asian nation slashed its oil imports from Russia, President Donald Trump said, adding that the two sides were “pretty close” to a “fair trade deal” that would be “good for everybody”.
New Delhi, however, struck a cautious note, with Commerce Minister Piyush Goyal saying that Prime Minister Narendra Modi’s government would not compromise with the interests of the farmers and the dairy workers of India while working out a trade deal with the US. He made the comment in New Delhi on Tuesday, a few hours after the US president exuded optimism in Washington, D.C., about the trade deal with India.
“We're making a deal with India, a much different deal than we had in the past. So right now, they don't love me, but they'll love us again,” Trump told journalists at the Oval Office in White House as one of his close aides, Sergio Gor, was sworn in as the envoy of Washington, D.C., to New Delhi by Vice President J D Vance. "We're getting a fair deal, just a fair trade deal. We had pretty unfair trade deals.”
The relations between New Delhi and Washington, D.C., came under stress over Trump’s tariff tirade against India, his public claim about making India stop buying oil from Russia, his growing bonhomie with the civil and military leadership of Pakistan and his boasts about mediating the May 10 ceasefire between the two South Asian neighbours.
New Delhi’s refusal to yield to the Trump administration’s demand for duty concessions for US companies in the agricultural and dairy sectors of India has been a sticking point in the negotiations between the two sides for the trade deal.
“But, we're getting close. Scott, I think we're pretty close to doing a deal that's good for everybody," Trump told the US Treasury Secretary, Scott Bessent, during the ceremony. “That's right,” replied Bessent.
Trump had announced on August 6 an additional 25% tariff – on top of the 25% levied earlier – on India’s exports to the US, in a move to dissuade the South Asian nation from buying oil from Russia. He and his aides often accused India of helping President Vladimir Putin to continue the war in Ukraine by purchasing oil from the former Soviet Union nation, defying sanctions imposed by the US and European Union.
“Well, right now the tariffs are very high on India because of the Russian oil, and they've stopped doing the Russian oil. It's been reduced very substantially. Yeah, we're going to be bringing the tariffs down,” Trump said, adding: “At some point, no, at some point, we're going to be bringing them down. Without tariffs, this country would be in such trouble as they were for many years.”
Russia’s share in India’s total crude oil imports rose from less than 2% before the launch of its war in Ukraine in 2022 to around 40% by 2023–24.
But, imports from Russia came down from over 2 million barrels per day in June to 1.6 million barrels per day in September, as the refiners slashed purchases of crude from the former Soviet Union nation.
India’s crude oil purchase from Russia, however, rebounded in the first half of last month to 1.8 million barrels per day.
Trump has, over the past few weeks, repeatedly claimed to have received an assurance from Prime Minister Narendra Modi about India slashing oil imports from Russia. This began on October 15, when he had said that the prime minister had assured him that India would cut down its oil imports from Russia. New Delhi stated that Modi and Trump had not spoken over the phone that day.
New Delhi, in response to the claim from Washington, D.C., had avoided an overtly confrontational approach and stated that India’s import policies had been entirely guided by the objective of safeguarding the interests of consumers in the country. Without directly clarifying if it would lower the import of oil from Russia, New Delhi has been maintaining that its energy policies included broad-basing and diversifying sources in accordance with market conditions.