Washington Agrees To Significantly Reduce Tariffs on India

A trade deal that is agreed in principle between America and the world’s most populous country, India, is cheered at Washington and New Delhi — so why was it so long in the making?The deal’s details are yet to be finalized but for now it will reduce American tariffs to 18 percent after India was slapped with one of the world’s highest tariff rates. Delhi will have no tariffs on American imports. Early in his second term, President Trump imposed on India a 25 percent tariff, citing a large trade imbalance. Last August Washington added another 25 percent as punishment for India’s purchase of Russian oil. Indians are now relieved at the news that tensions between the countries have been eased. “India and the U.S. are not only close democratic partners, but they are natural allies,” the executive editor of Hindustan Times, Shishir Gupta, tells The New York Sun. The proposed deal, he adds, is “win-win for both sides. It’s only a matter of concern that it got delayed, with people talking at cross purposes.”The breakthrough appears to have been the arrival at Delhi of a new American ambassador, Sergio Gor. Fresh from a stint as Mr. Trump’s personnel office chief, the Uzbekistan-born businessman vied for the Delhi post. Last summer Mr. Trump named Mr. Gor his special envoy to south and Central Asia. His official Delhi posting last month ended a period in which some in Mr. Trump’s inner circle urged a chill in India ties. “The fact that Ambassador Gor is now in place marks the real beginning of the Trump 2.0 India relationship,” a senior fellow and Asia watcher at the Foundation for Defense of Democracies, Cleo Paskal, tells the Sun. In Mr. Trump’s first term, she adds, America tightened relations with India. Beyond trade, good relations with Delhi boost an indo-pacific alliance to compete with Communist China. India shares a 1,200 mile disputed border with China, and it sees itself as a rival. “Resolving the relationship with India is going to be key” to figuring out America’s competition with Beijing, Ms. Paskal says. Foreign Minister Subrahmanyam Jaishankar is at Washington this week, discussing such topics as adding India to Pax Silica, a global alliance forged to compete with Beijing over technologies like artificial intelligence. The alliance is also promoting mining and processing of rare earths and other minerals — fields now dominated by Communist China.The details of the deal are yet to be fleshed out, but members of the Trump admisnitration are hailing it. “Prime Minister Modi committed to $500 billion of purchases of U.S. energy, transportation, agricultural products and the US tariff on India will now get 18 percent, but American exports to India will face a tariff tariff of zero percent,” White House press secretary, Karoline Leavitt, said Tuesday. New Delhi has been sensitive to Mr. Trump’s close ties with Islamabad and with the new tariff rate India now compares favorably to its adversary, Pakistan, which America imposes 19 percent tariff on — similar to such allies as Vietnam and Indonesia. Another source of angst in India was the fact that until now it was hit with a punishment over its oil purchases with Russia, even though America’s tariff on Communist China remained at 34 percent while Beijing was also buying large quantities of Russian oil. “It was an Honor to speak with Prime Minister Modi, of India, this morning,” Mr. Trump wrote on Truth Social Monday. “He agreed to stop buying Russian oil, and to buy much more from the United States and, potentially, Venezuela. This will help end the war in Ukraine.”New Delhi did not confirm such an agreement. Yet India is slashing its oil purchase from Russia to 1.2 million barrels a day from a peak of 2 million barrels. Losing most of its European energy market, Moscow was forced to sell oil at a discount price, and India, the world’s third-largest consumer of oil, was an easy target. “India’s problem with oil is that India does not have oil,” Mr. Gupta says. “India was not buying oil to spite the U.S. It was buying oil to ensure that the prices were low.” India will maintain relations with Moscow, including on arms. As in the oil market, though, it has already started to significantly replace Russian systems with America, French, and Israeli systems. “Wonderful to speak with my dear friend President Trump today,” Mr. Modi wrote Monday. “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”

Washington Agrees To Significantly Reduce Tariffs on India

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