US May Scrap 25% Penal Tariff on Indian Goods, shares V. Anantha Nageswaran

The United States may soon scrap the 25% penal tariff on Indian imports and reduce the reciprocal tariff from 25% to 10–15%, said India’s Chief Economic Adviser, V. Anantha Nageswaran, on Thursday. Speaking at an event in Kolkata, he expressed confidence that a resolution could be reached within the next few months.

India and the U.S. recently held positive and forward-looking trade talks, raising hopes of improved bilateral relations. The tariffs, originally imposed under Donald Trump’s administration as part of Washington’s pressure campaign on Moscow over the Russia-Ukraine war, had strained ties between New Delhi and Washington.

Trump had earlier doubled tariffs on Indian goods to 50% from August 27, following India’s purchase of Russian oil. However, in a recent call between Trump and Prime Minister Narendra Modi, both leaders signaled willingness to strengthen economic and strategic cooperation.

The possibility of tariff reductions has already boosted market sentiment, with the Nifty 50 index hitting one-week highs and recording its strongest close since July 9. Analysts believe easing tariffs could significantly benefit India-U.S. trade, support exporters, and improve investor confidence.