India to increase Russian oil imports, despite US tariffs

India is expected to increase its imports of Russian oil in September, despite United States President Donald Trump’s decision to double tariffs on Indian goods coming into effect. 

According to Reuters on August 28th, New Delhi plans to raise Russian oil imports even though the tariff hike was directly linked to these purchases.

The tariff hike, which took effect on August 27th, adds a 25 percent duty on top of an existing 25 percent tariff on a broad range of Indian products. The result is a combined levy reaching 50 percent on items such as clothing, gems and jewellery, footwear, furniture, sporting equipment, and chemicals.

Reports indicate that the tariffs, among the toughest imposed by Washington, have damaged ties between the two nations, which had previously cultivated a close strategic partnership.

Five rounds of negotiations failed to produce a deal that would have lowered tariffs to around 15 percent, similar to agreements Washington has reached with Japan, South Korea, and the European Union.

Analysts warn that the tariffs could slow growth in India, which has been the world’s fastest-growing major economy. Markets have already reacted badly: Indian stocks had their biggest drop in three months on August 26th, and the rupee fell to a three-week low. Export groups say that over half of India’s $87 billion in goods sold to the U.S. could be affected, giving countries like Vietnam, Bangladesh, and China an advantage.

Economists argue that India could use the crisis to accelerate reforms and reduce its own protectionism. “Allowing the rupee to depreciate is one way to provide indirect support to exporters,” said Rajeswari Sengupta, a Mumbai-based professor. Others warn that if tariffs remain in place, as many as 2 million jobs could be at risk.

Some goods, including steel, aluminium, passenger vehicles, and copper, remain exempt due to separate national security tariffs.

The planned increase in Russian oil imports follows reports of stronger Russia-India trade ties, with Russian Foreign Minister Sergey Lavrov and Indian Foreign Minister Subrahmanyam Jaishankar announcing record trade turnover.

Amidst the backdrop of the Russia-Ukraine war, in which peace talks are currently stalled, these trade ties will likely continue to attract international attention.

Reuters, Maghrebi.org,