New Delhi: India were stung by 25 per cent penal tariff by the US for continuing to purchase Russian oil, which was in addition to the reciprocal 25 per cent tax levied earlier.
As trade talks resumed between the two countries following weeks of tariff tension, good news could be round the corner for Indian exporters who were hard hit by the steep taxes.
India’s Chief Economic Adviser (CEA) V Anantha Nageswaran said on Thursday that the penal tariff imposed on Indian imports by the Donald Trump administration may be withdrawn after November 30.
Expressing optimism that trade ties between the two countries will see significant improvement, Nageswaran said talks are underway to improve the situation.
“I do believe that the penal tariffs will not be there beyond November 30. It’s not a statement based on any concrete indicator or evidence, but it is my hope that, given the recent developments, I do believe there will be a resolution in the next couple of months on the penal tariff and hopefully, reciprocal tariff also,” Nageswaran said at an event in Delhi.
“All of us are already at work, and I will take some time to talk about the tariff here. Yes, the original reciprocal tariff of 25 per cent plus the penal tariff of 25 per cent both were not anticipated. I still believe that geopolitical circumstances may have led to the second 25 per cent tariff, but considering recent developments in the last couple of weeks and so on, I do believe that and I have no particular reason to say so it is my intuition that I do believe the penal tariff will not be there after November 30,” ANI quoted the CEA as saying.
According to Nageswaran, the trade tensions between India and the US could be resolved in about 10 weeks.
“Underneath the surface, conversations are going on between the two governments. My hunch is that in the next eight to ten weeks, we will likely see a solution to the tariff imposed by the US on Indian goods,” Nageswaran told PTI.
The CEA indicated that the reciprocal duty, currently at 25%, may be reduced to 10-15%.
Earlier this week, Rajesh Agrawal, Special Secretary in ministry of Commerce, met US Trade Representative for South and Central Asia Brendan Lynch in New Delhi.
It was the first face-to-face meeting between the two sides since additional tariffs took effect on August 27.
Interestingly, President Trump’s imposition of reciprocal tariffs on India and other countries — under the International Emergency Economic Powers Act (IEEPA) — was deemed unlawful by the US Appeals Court.
The Trump administration has approached the Supreme Court, seeking the local court’s ruling be overturned so that the global tariffs remain in place.
