A recent survey examining India's economic landscape has revealed that a potential trade agreement with the United States could significantly reduce external uncertainty while private investment intentions continue to show positive momentum.

Trade Deal Impact on External Uncertainty

The survey findings suggest that a US trade deal would help mitigate external uncertainties that have been affecting India's economic environment. Such an agreement could provide businesses with greater predictability in trade relations, potentially creating a more stable framework for long-term planning and decision-making.

Rising Private Investment Sentiment

According to the survey results, private investment intentions are demonstrating an upward trajectory. This positive trend indicates growing confidence among private sector participants in India's economic prospects and their willingness to commit capital to various business opportunities.

Economic Implications

The combination of reduced external uncertainty through potential US trade cooperation and increasing private investment appetite suggests a favorable environment for economic growth. These factors could work together to strengthen India's position in global markets while supporting domestic economic expansion.

The survey results highlight the interconnected nature of international trade relationships and domestic investment climate, demonstrating how external agreements can influence internal economic confidence and capital allocation decisions.

The United States has signalled potential flexibility regarding the 25% tariff imposed on India over Russian oil purchases, with Treasury Secretary Scott Bessent indicating there could be a pathway to removing the levy.

Policy Success Cited as Basis for Potential Relief

Speaking to Politico on the sidelines of the World Economic Forum in Davos, Bessent expressed optimism about the tariff's removal, stating "I would imagine there is a path to take them off." The Treasury Secretary emphasized that the tariff had achieved its intended purpose.

Tariff Effectiveness Demonstrated

Bessent argued that the tariff had worked as intended, pointing to a significant reduction in Russian oil purchases by Indian refineries. "The purchases of Russian oil by their refineries has collapsed, so that is a success," he stated, while confirming that "the 25% Russian oil tariffs are still on."

The Treasury Secretary's comments suggest that the policy's effectiveness in reducing Indian purchases of Russian oil could serve as justification for its eventual removal, though no specific timeline or conditions were outlined.

Current Trade Policy Status

While Bessent's remarks indicate potential diplomatic flexibility, he made clear that the tariff remains active. The 25% levy was originally imposed as part of broader efforts to limit Russian oil revenues, with India being targeted due to its continued energy purchases from Russia.

The Treasury Secretary's statements at Davos represent the first official indication from the current administration regarding potential modifications to the India-specific tariff policy.