Chief Economic Adviser (CEA) to the Government of India, V Anantha Nageswaran, on Thursday said that the additional 25% penal tariffs imposed by Donald Trump on India may be withdrawn by November 30. With this, he has expressed positivity that the trade ties between India and the US will significantly improve.
Talking about the tariff tensions between the two major economies, Nageswaran reflected that the developments were underway to improve the situation.
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While speaking at the 125th anniversary celebration of Bharat Chamber in Kolkata, the top official said, "All of us are already at work, and I will take some time to talk about the tariff here. Yes, the original reciprocal tariff of 25 percent plus the penal tariff of 25 percent were not anticipated. I still believe that geopolitical circumstances may have led to the second 25 percent tariff, but considering recent developments in the last couple of weeks and so on, I do believe that, and I have no particular reason to say so. It is my intuition that I do believe that the penal tariff will not be there after November 30."
US President Donald Trump had decided to impose the additional 25 percent tariffs on Indian imports as a "penalty" for its continuous oil trade with Russia. The duties took a total of 50%, after an additional charge over the reciprocal 25% tariffs.
CEA Nageswaran added that there might be a resolution to the trade tensions in about ten weeks. He said, "Underneath the surface, the conversations are going on between the two governments. My hunch is that in the next eight to ten weeks, we will likely see a solution to the tariffs imposed by the US on Indian goods."
The additional tariffs came into effect on August 27. Ever since then, there has been a turnaround from the past tensions between Prime Minister Narendra Modi and President Donald Trump. The reciprocal tariff decision was also termed unlawful by the US Appeals Court, stating that Trump overstepped his authority.