NEW DELHI: A couple of booster shots have arrived just before the Union Budget, which could possibly lift the sentiments of the Indian economy further.
Even as the country is all set to sign a free trade deal with the European Union, which both sides see as the ‘mother of all deals’, the US hinted at a diplomatic path to lift the 25% additional import duty it levied on Indian goods after a “marked decline in India’s imports of Russian oil in recent months”.
US Treasury Secretary Scott Bessent hinted during a media interaction that the US administration could consider reducing the 50% tariff imposed on several sectors of Indian exports, as there has been a significant fall in imports of Russian oil in recent months.
The indication is being seen as hints of a potential easing of trade headwinds at a crucial juncture. Coming just a week ahead of the Union Budget 2026, the development has raised hopes of improved export prospects, stronger bilateral trade sentiment, and a more supportive global backdrop for India’s growth narrative.
During his interaction with an American news outlet Politico at the World Economic Forum in Davos, Bessent said: “We put 25% tariffs on India for buying Russian oil. And the Indian purchases, by their refineries, of Russian oil have collapsed. That is a success.” Bessent assured that the administration will be open to discussions to ease them. “The tariffs are still on. I would imagine there is a path to take them off.”
US President Donald Trump announced a total of 50% tariff (including a 25% tariff due to imports of crude oil from Russia) on several Indian exports, including textile, apparel, carpets, gems and jewelleries from August-end. This additional tariff came as a penalty for buying Russian oil. According to Bessent, the tactic of pressuring India has worked as the import of crude oil from Russia has come down considerably in the last few months.
As per Kpler, a real-time trade intelligence tool for global markets, India’s Russian crude import in December stood at 1.2 million barrels per day, down 35% from 1.8 mbd in November. Despite Russia being the top exporter of oil for India, its share in India’s crude imports dipped to 25% in December from the peak of 35%. On the other hand, oil imports from the US have been increasing from a low of 67,000 barrels per day (kbd) in December 2024 to 3,30,000 barrels per day in December 2025.