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US President Donald Trump stated on Friday that Russia has lost India as a buyer of its oil after the US imposed penalties on New Delhi for these purchases. However, he suggested that he might not enact similar tariffs on nations that continue to buy Russian crude oil. His comments came as India has not yet verified whether it will stop buying oil from Russia after the US announced a 25 percent duty in addition to a 25 percent tariff on Indian products last month. This extra duty is set to start on August 27. The US had warned of sanctions against Moscow and additional sanctions on countries purchasing its oil if there are no efforts to resolve the war in Ukraine. China and India are the largest purchasers of Russian oil. Trump remarked, “Well, he (Russian President Vladimir Putin) lost an oil buyer, so to speak, which is India, which was responsible for about 40 percent of the oil. China, as you know, is buying a lot...And if I implement what’s known as a secondary sanction or a secondary tariff, it would be very damaging for them. If I need to do it, I will. Maybe I won’t have to,” Mr. Trump told Fox News while heading to Alaska for an important meeting with his counterpart, Vladimir Putin.
On August 6, Mr. Trump intensified his tariff strategy against India by adding a 25 percent duty and then increasing it to 50 percent on Indian goods due to New Delhi's ongoing purchases of Russian oil. India criticized the “unfair, unjustified, and unreasonable” action, which is expected to severely impact sectors like textiles, marine, and leather exports. Prime Minister Narendra Modi previously stated that New Delhi would not yield to economic pressure. With this action targeting India specifically for its Russian oil imports, India will face the highest US tariff of 50 percent, similar to Brazil. Both Russia and China, among others, have criticized Mr. Trump for imposing illegal trade pressure on India. A Bloomberg report indicated that India's state-owned refiners ceased buying Russian crude following Mr. Trump's action, although the government has not yet made any official statements about it.
On Thursday, AS Sahney, chairman of Indian Oil Corporation, said that India has not stopped purchasing oil from Russia and continues to buy based solely on economic factors. India became the largest buyer of Russian oil in 2022, after Western nations distanced themselves from Russian oil and imposed sanctions due to its invasion of Ukraine. According to a report from the State Bank of India, India’s crude oil import costs could rise by 9 billion USD this financial year and an additional 12 billion USD in the next year if the country stops buying Russian crude oil.
The document additionally mentioned that India might look into purchasing oil from Iraq, which was its leading supplier prior to the conflict in Ukraine, then followed by Saudi Arabia and the UAE if Russian shipments are halted. The data analysis company Kpler Ltd stated that Indian purchasers are being offered Russian crude at reduced rates due to the sanctions from the European Union and warnings of penalties from the United States affecting the demand forecast, as reported by Bloomberg.
