A major relief has emerged in the ongoing tariff war between India and the US. The government’s Chief Economic Advisor has stated that the US may lift the 25% additional tariff. If this happens, it would be a major victory for India and improve trade relations between the two countries. This statement comes at a time when India’s exports have suffered a sharp decline due to recent US-imposed tariffs.
Why were the ‘additional’ tariffs imposed?
The US recently imposed a 25% additional tariff on India, citing its oil imports from Russia as the primary reason. The US alleged that India was strengthening Russia’s economy by purchasing Russian oil, thereby aiding Russia in the Ukraine war. However, India vehemently denied these allegations. Following this tariff, India’s exports were adversely affected and saw a sharp decline.
Why could the ‘tariff war’ end ?
Recently signs of improvement in relations were seen after a social media exchange between US President Donald Trump and Prime Minister Narendra Modi. Trump described Modi as a “very good friend” and expressed his desire to move forward with the trade agreement. Following this, US chief negotiator Brendan Lynch also visited India, reviving talks.
The Chief Economic Advisor has stated that the US is considering lifting tariffs to help India’s exports recover. This decision will not only strengthen trade relations between the two countries but also send a positive message to global trade. This news is a major relief for Indian exporters, especially those sectors most affected by the tariffs, such as textiles, jewelry, and leather. It remains to be seen whether the US will soon lift these tariffs and usher in a new chapter in relations between the two countries.
