The recent summit in Alaska between US President Donald Trump and Russian President Vladimir Putin, aimed at addressing the ongoing conflict in Ukraine, has sparked global interest, particularly in countries like India that have significant trade relations with both the US and Russia. While the summit did not yield any concrete agreements or a ceasefire, the discussions have raised hopes, albeit cautiously, for a potential reduction in US tariffs on Indian imports.
In recent weeks, the US has imposed a 50% tariff on Indian goods, a move that analysts fear could negatively impact India's exports and GDP. This tariff includes a 25% penalty on India's crude oil purchases from Russia. The US has been critical of India's continued trade with Russia, especially its import of Russian oil, following the invasion of Ukraine.
However, following the Alaska summit, there are indications that the US might be reconsidering its stance on tariffs, not just for India, but also for other nations like China that import Russian oil. In an interview, President Trump stated that he might postpone imposing tariffs on China due to progress made in discussions with Putin. While he did not directly mention India, this statement suggests a potential shift in approach.
The Indian government has so far refrained from commenting on the summit's outcome. However, the Ministry of External Affairs (MEA) welcomed the meeting between Trump and Putin, expressing hope for a peaceful resolution to the Ukraine conflict through dialogue and diplomacy.
Despite the cautious optimism, uncertainty remains. Trump, in an interview, claimed that India has already stopped buying Russian oil, a statement that contradicts available data. He also reiterated his previous claims of mediating a ceasefire between India and Pakistan, which India has denied.
Experts suggest that the possibility of reduced tariffs hinges on several factors. If the Trump administration believes it is making progress with Putin on resolving the war, it might ease the pressure on countries like India. However, any perceived negative outcome from the meeting for Trump could lead to India "paying a price".
The US stance on tariffs is also linked to broader trade negotiations with India and Washington's displeasure with India publicly questioning Trump's claims of brokering peace with Pakistan.
The coming weeks will be crucial in determining the future of US-India trade relations. The August 27 deadline for implementing the additional 25% tariff is approaching, and whether the US decides to postpone or roll back the tariffs will depend on further developments in the US-Russia relationship and the ongoing discussions surrounding the Ukraine conflict.
