Russian oil purchase, zero tariff…what is the India-US trade deal? America released fact sheet

New Delhi: A major trade agreement between India and America has now reached the final stage. Both countries have termed it ‘historic’. US President Donald Trump has made many claims, but lack of clarity on some issues has raised questions. Especially on India’s claims of stopping the purchase of Russian oil and imposing zero tariff on American goods. Amidst these doubts, the White House released a fact sheet on Monday, in which many things have been clarified.

What is the situation on Russian oil purchases?

According to the fact sheet of the Trump administration, India has committed to stop buying oil from Russia. In return, America removed the additional 25% tariff on imports from India. Trump implemented it by signing an executive order.

However, Russia said that it did not receive any such information from India. India’s Foreign Ministry also reiterated that the decision on oil purchase will be taken giving priority to the energy needs of the country’s 1.4 billion population. That means there is more possibility of a reduction rather than a complete shutdown, but America has talked about monitoring – if India buys Russian oil again, tariffs may be imposed again.

How true is the claim of zero tariff?

Trump claimed that India will reduce the tariff and non-tariff barriers imposed against America to zero. The joint statement and fact sheet said India will eliminate or significantly reduce tariffs on US industrial goods and several agricultural products—such as dry distillers grains (DDG), red sorghum, dry fruits, fresh and processed fruits, some pulses, soybean oil, liquor, spirits, etc.

India has promised to increase the purchase of American products, which includes goods like energy, technology, agriculture, coal etc. worth more than 500 billion dollars in 5 years. There is also agreement to remove the digital service tax and negotiate on digital trade rules. But the complete details of India’s tariffs on American goods are not yet clear.

It was made clear in the fact sheet that this is the framework of an interim agreement. Both the countries will now continue negotiations on remaining tariffs, non-tariff barriers, technical barriers, custom facilities, regulatory practices, services, investment, IP, labour, environment, government procurement etc. The goal is a full Bilateral Trade Agreement (BTA).

What next?

This agreement is considered beneficial for both the countries. India’s huge market will open up to America, while India will get better access to the American market. But there is still confusion over claims like Russian oil and absolute zero tariff. The White House said that an interim agreement will be finalized in the coming weeks, which will lay the foundation for a larger BTA.