Trump’s tariffs cost India more than it saved on Russian oil — Reuters
Illustrative photo: India risks losing all its savings on Russian oil (Getty Images)
India may lose much more than it could save by buying cheap Russian oil after US President Donald Trump's new tariffs. It was New Delhi's trade deals that caused pressure from the US, Reuters reports.
According to analysts, India could save at least $17 billion from 2022 by increasing imports of cheap Russian oil. However, Trump's new tariffs could reduce Indian exports by 40% in the short term and lead to a loss of $37 billion, which is twice the profit from Russian oil.
"The fallout from the tariffs will be lingering, and could be politically debilitating for Prime Minister Narendra Modi, with thousands of jobs at risk in labour-intensive sectors such as textiles, gems, and jewellery," the article says.
Now everything depends on India's actions. In the coming weeks, New Delhi's response could change India's long-standing partnership with Russia, as well as its relationship with the US, which is vital to both countries' plans to counter China's growing influence.
Analyst and founder of the Delhi Council for Strategic and Defense Studies, Happymon Jacob, explained in a comment to the publication that India is unlikely to give up trade with Russia so easily.
According to him, Russia will be needed as a supplier of defense equipment and cheap oil for at least several years. India also wants to find geopolitical support on the continent and support on certain political issues in the Kremlin.
"That makes Russia an invaluable partner for India," he explains.
On the other hand, the problem is that the US is also India's most important strategic partner. This puts New Delhi in a difficult position: the Indian government must make a choice, but for obvious reasons, it is unable to do so, at least for now.
Sources in the Indian government told the agency that India wants to restore relations with the US, which have deteriorated significantly in recent times. But they rejected the possibility of abandoning Russian oil.
Tariffs for India
On August 27, US President Donald Trump signed a decision to impose 50% tariffs on imports of Indian goods. The move is aimed at punishing New Delhi for continuing to purchase Russian oil, which, according to Trump, finances Russia's war against Ukraine.
The US has repeatedly pressured India over its cooperation with Russia in the oil sector. Washington accuses New Delhi of helping the Kremlin generate profits to finance the war against Ukraine by purchasing Russian oil at reduced prices.
