US President Warns of Higher Tariffs Amid India’s Continued Import of Discounted Russian Crude
Trump’s Tariff Threats and India’s Response
US President Donald Trump has intensified his stance against India’s ongoing purchase of Russian oil, threatening to “substantially” increase tariffs on Indian goods imported into the United States. This threat follows his earlier announcement of a 25 percent tariff on Indian imports, alongside an unspecified penalty.
In a Truth Social post, Trump accused India of profiting by buying large volumes of Russian oil at discounted prices and reselling it on the open market. He also criticized India’s perceived indifference toward the humanitarian impact of Russia’s invasion of Ukraine:
“India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine.”
He warned:
“Because of this, I will be substantially raising the Tariff paid by India to the USA,”
However, he did not specify the new tariff rate.
Impact on Indian Economy and Energy Policy
Government sources have downplayed the economic impact of the existing 25% tariff, suggesting it will have a negligible effect on India’s economy. Analysts estimate the GDP loss would not exceed 0.2 percent.
Despite the US pressure, Indian officials reaffirmed that the country’s energy purchases are driven by national interests and market forces, and Indian oil companies will continue buying Russian crude.
India is the world’s third-largest crude oil importer, behind China and the US. Historically reliant on Middle Eastern oil, India shifted to discounted Russian oil after Western sanctions following Russia’s invasion of Ukraine in 2022.
Background: India-Russia Oil Trade and Geopolitical Tensions
- In 2022, India’s External Affairs Minister S. Jaishankar defended the oil imports, stating India’s Russian oil purchases are much smaller compared to Europe’s.
- India imports around 2 million barrels of oil per day, approximately 2% of global supply.
- Other major buyers of Russian crude include China and Turkey.
Trump’s recent criticisms also highlight the broader trade imbalance between the US and India. He accused India of maintaining some of the highest tariffs and strictest non-monetary trade barriers, which have limited bilateral trade growth.
India’s Economic Outlook and Domestic Focus
Prime Minister Narendra Modi has emphasized the importance of self-reliance amid global economic uncertainty. In a recent public address in Varanasi, Modi called for greater support of locally made products:
“The world economy is facing instability and uncertainty. Countries are focusing solely on their own interests. India is on the path to becoming the world’s third-largest economy and must prioritize its economic goals.”
He urged citizens to participate in a national movement to bolster domestic manufacturing and reduce dependence on imports.
Summary: What’s Next for US-India Trade Relations?
- Trump threatens higher tariffs targeting India’s Russian oil imports.
- India stands firm on energy security and economic sovereignty.
- Trade tensions persist amid differing geopolitical and economic priorities.
- India pushes for self-reliance and economic growth despite international pressure.
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