India offers final proposal to US in trade talks:Negotiations seek to reduce tariff from 50% to 15% and penalty removal on Russian oil purchases

India has presented its final proposal to the US in trade talks. India seeks to reduce the total 50% tariff imposed on it to 15% and to completely remove the extra 25% penalty on crude oil purchases from Russia. The ongoing talks between the two countries raise hopes of a concrete decision in the new year. Negotiations are underway for a comprehensive bilateral trade agreement (BTA) between the two countries. Commerce Secretary Rajesh Agarwal said that consensus on the agreement could be reached soon, although he did not specify any timeline. This week, the trade teams of India and the US met in Delhi. The talks are focused on two issues: first, a large and permanent trade agreement, and second, a framework agreement to remove or reduce the 50% tariff imposed on India by the US. Also Read | How India bypassed Trump’s tariff push 25% tariff due to Russian oil purchases The United States has imposed a total 50% tariff on India. Of this, 25% is classified as a ‘reciprocal tariff,’ while the remaining 25% is imposed due to India’s purchases of Russian oil. The US argues that these purchases indirectly support Russia’s war efforts in Ukraine. India, however, maintains that this penalty is unjust and should be removed immediately. Commerce Secretary Rajesh Agarwal has expressed confidence in the framework agreement under discussion, stating that a consensus could be reached soon, though he did not provide a specific timeline. Sources involved in the talks indicate that the likelihood of finalising the agreement within 2025 is diminishing, as the year draws to a close. Negotiations on the framework were reportedly completed around Diwali, but a formal announcement from the US, particularly from President Donald Trump, is still awaited. Officials point directly to the White House for the delay. Also Read | India, New Zealand finalise free trade deal after 10-year talks Russian oil imports may decline There is, however, reason for cautious optimism. January figures may show a significant reduction in India’s imports of Russian oil. Since November 21, US sanctions have targeted Russia’s major oil companies, Rosneft and Lukoil, and India’s imports from Russia have begun to decline. According to a Reuters report, India’s Russian oil imports fell from approximately 1.77 million barrels per day in November to around 1.2 million barrels per day in December. In the near future, this figure could drop below 1 million barrels per day. Following the Ukraine war, India became Russia’s largest oil buyer, a move repeatedly questioned by the Trump administration, which argued that India’s purchases indirectly fund Russia’s attacks on Ukraine. India seeks tariff relief similar to the EU India is now pushing to reduce the remaining 25% tariff to 15%, seeking the same relief granted to the European Union. If the tariff remains higher, Indian exporters could face a competitive disadvantage. For comparison, the US tariff on Indonesia was reduced from 32% to 19%. India insists it should receive similar treatment. The country has clearly conveyed to the US that the penalty related to Russian oil should be removed and that the total tariff should be lowered to 15%. The decision now rests with the US, and all eyes are on President Trump. ​