Trump Considers Revisiting Tariff Strategy on India Amid Russian Oil Trade Concerns
US President Donald Trump indicated on Friday that he might reconsider the 25 percent tariff imposed on India due to its ongoing imports of Russian crude oil. This statement comes despite India not formally announcing any cessation of oil purchases from Moscow.
Trump's comments followed last month's announcement by Washington of a 25% duty on Indian goods, which was subsequently increased to 50%. This hike was attributed to India’s oil trade with Russia amidst the ongoing conflict in Ukraine. The additional duty is slated to be enforced on August 27.
Trump: "Maybe I Won’t Have To Do It"
In an interview with Fox News before departing for a significant meeting in Alaska with Russian President Vladimir Putin, Trump asserted that Russia had "lost India as an oil client," while suggesting the possibility of reversing the tariffs.
He remarked, “Well, he (Putin) lost an oil client, so to speak, which is India, which was doing about 40 percent of the oil. China, as you know, is doing a lot… And if I did what’s called a secondary sanction, or a secondary tariff, it would be very devastating from their standpoint. If I have to do it, I’ll do it. Maybe I won’t have to do it.”
India Pushes Back Against ‘Unfair’ Tariffs
On August 6, Trump intensified the trade dispute by imposing an additional 25% duty on Indian goods, which was quickly doubled to 50%. This action has elicited strong criticism from New Delhi.
India denounced the tariffs as "unfair, unjustified, and unreasonable," with Prime Minister Narendra Modi asserting that India “will not back down in the face of economic pressure.” The tariff increase is expected to significantly impact exports in sectors such as textiles, marine products, and leather.
In addition to India, Brazil has also been subjected to the highest US tariffs, while Russia and China have accused Washington of applying "illegal trade pressure."
Confusion Over India’s Russian Oil Purchases
A Bloomberg report suggested that India's state-owned refiners had ceased purchasing Russian crude following the US measures, although Indian officials have contested this claim.
AS Sahney, Chairman of Indian Oil Corporation, clarified that India has not stopped buying Russian oil, stressing that procurement decisions are based on “economic considerations.”
The Stakes for India’s Energy Security
In 2022, India became the largest buyer of Russian crude after Western sanctions isolated Moscow. A report from the State Bank of India indicates that halting Russian oil imports could raise India's import bill by USD 9 billion this year and USD 12 billion the following year.
Analysts suggest that if forced to cut Russian imports, India may turn back to traditional suppliers such as Iraq, Saudi Arabia, and the UAE. However, Russian crude remains available at discounted rates as demand declines due to EU and US sanctions.
