Washington D.C. - In a move signaling a potential shift in international trade dynamics, a U.S. panel will be closely monitoring India's oil imports from Russia, following an executive order signed by President Trump. The order, executed on Friday, rescinds a 25% tariff penalty that had been imposed on India for its continued procurement of Russian energy. This decision comes on the heels of a recently announced trade agreement between the United States and India, aimed at reducing tariffs and fostering stronger economic cooperation.

According to the executive order, the removal of the tariff is contingent upon India ceasing its direct or indirect imports of oil from the Russian Federation. The order stipulates that U.S. officials will maintain a watchful eye, and should India resume importing Russian oil, the tariff could be reinstated.

The executive order also states that India has committed to purchasing more energy products from the United States. Furthermore, the U.S. and India have established a framework to expand defense cooperation over the next ten years. The order suggests that India has taken "significant steps” to address U.S. concerns regarding Russian oil purchases and align with the U.S. on matters of national security, foreign policy, and economics.

While the U.S. has asserted that India has committed to halting Russian oil imports, there has been no official confirmation from New Delhi. India has previously defended its decision to purchase oil from Russia, citing its national interest and the need to ensure energy security for its large population. Trade Minister Piyush Goyal stated the new agreement protects the interests of Indian farmers, especially regarding sensitive agricultural and dairy products.

The agreement between the U.S. and India has been in the works for some time, with both countries seeking to realign global supply chains. The newly established framework seeks to lower tariffs, reshape energy ties, and deepen economic cooperation.

President Trump initially imposed a 50% tariff on certain goods from India, half of which was a penalty for the country's continued oil imports from Russia. With the new agreement, tariffs on Indian goods will be reduced to 18 percent.

The U.S. decision to monitor India's oil imports from Russia underscores the delicate balance between economic interests and geopolitical concerns. The monitoring mechanism established by the executive order will play a crucial role in determining whether India adheres to the commitment of ceasing Russian oil imports, and it remains to be seen how this will impact the broader relationship between the two countries.