Key points
- Amid stalled trade talks with US, India faces tough choices
- Ending purchases of Russian oil could be painful for Indian Economy
- Tariff threats from US pose even greater risks
ISLAMABAD: US President Donald Trump is trying to drive India away from Russia, threatening to hike tariffs on Indian exports.
However, decades of close economic, political and military relations between New Delhi and Moscow mean Trump faces a challenge in persuading Indian Prime Minister Narendra Modi to drop a partnership that has survived great geopolitical turmoil, according to the Wall Street Journal.
Amid the stalled trade talks with the US, India faces tough choices.
It faces an ultimatum from the United States with major political and economic ramifications both at home and abroad: end purchases of Russian oil or face painful tariffs.
Longstanding ally
US President Donald Trump has given longstanding ally India, one of the world’s largest crude oil importers, three weeks to find alternative suppliers.
Levies of 25 per cent already in place will double to 50 per cent if India doesn’t strike a deal.
For Trump, the August 27 deadline is a bid to strip Moscow of a key source of revenue for its military offensive in Ukraine.
Agriculture employs vast numbers of people in India and has been a key sticking point in trade negotiations.
Far cry
It all seems a far cry from India’s early hopes for special tariff treatment after Trump said in February, he had found a “special bond” with Modi.
“The resilience of US-India relations… is now being tested more than at any other time over the last 20 years,” said Michael Kugelman, from the Asia Pacific Foundation of Canada.
Russia accounted for nearly 36 per cent of India’s total crude oil imports in 2024, snapping up approximately 1.8 million barrels of cut-price Russian crude per day, according to AFP.
Buying Russian oil saved India billions of dollars on import costs, keeping domestic fuel prices relatively stable.
Switching suppliers will likely threaten price rises, but not doing so will hit India’s exports.
The Federation of Indian Export Organisations warned that the cost of additional US tariffs risked making many businesses “not viable”.
