Bloomberg: Trump's increase in duties against India came as a shock to New Delhi
India is Trump's main target in his pressure on Russia to end the conflict in Ukraine, Bloomberg reports. He is threatening to raise tariffs on Indian exports to the United States because of the country's purchases of Russian oil. New Delhi called this step unjustified. The confrontation between the two large economies is growing.
Jennifer A. Dlougy
President Donald Trump has said he will “significantly raise” tariffs on Indian exports to the United States due to the Asian country's purchases of Russian oil. New Delhi called the move unjustified; a standoff is growing between the two major economies.
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“India not only buys a huge amount of Russian oil, but then sells most of the purchased oil on the open market at a large profit," Trump wrote on social media on Monday. — They don't care how many people in Ukraine are killed by the Russian military machine. Because of this, I will significantly increase the duties that India pays to the United States.”
Trump did not say how much he would increase this fee. Last week, he announced a 25% tariff on Indian exports — one of the highest for any major economy — and promised to increase duties if India continued to buy oil from Russia.
The US president's warning came shortly before the August 8 deadline for Russia to reach a truce with Ukraine, while the presidential administration is threatening so-called secondary sanctions against countries that purchase Russian energy. Ukraine's allies view these purchases as helping Vladimir Putin's economy and helping ease pressure on Moscow to end the conflict, which has been going on for four years.
India is Trump's main target in the campaign to end the conflict. Prime Minister Narendra Modi, who previously had warm relations with Trump, behaved defiantly, urging Indians to buy Indian goods and making it clear that his country would continue to buy Russian oil.
Later on Monday, the Indian Ministry of Foreign Affairs posted a message on social media in which it criticized the EU and the United States for continuing to buy energy and other materials from Russia when “such trade is not even necessary for their countries.” It noted that India began buying oil from Russia because after the outbreak of the conflict, traditional suppliers redirected their supplies to Europe, and the United States “encouraged such imports.”
“Attacks on India are unjustified and unwise," the ministry said. "Like any major economy, India will take all necessary measures to protect its national interests and economic security.”
India became a major buyer of Russian oil after the outbreak of the conflict in Ukraine in 2022; discounts contributed to this. According to tanker movement data compiled by Bloomberg, the country has been buying about 1.7 million barrels per day of Russian crude oil on average this year.
According to Kpler, India exported about 1.4 million barrels of petroleum products per day in the first half of this year. Supplies of diesel fuel or gas oil accounted for about 40% of total fuel exports, while gasoline and blending components accounted for about 30%.
However, it is difficult to quantify how much of India's oil exports come from Russian oil, as refineries typically consume oil of various origins and then sell an even wider range of fuels. The EU recently implemented a package of sanctions that will ban the purchase of fuel produced from Russian oil, but traders are still waiting for detailed explanations on how these measures will work in practice.
Last weekend, at least four tankers unloaded millions of barrels of Russian oil to Indian refineries, indicating that such closely monitored shipments are continuing as if nothing had happened.
Any disruptions to India's purchases of Russian oil may force it to look for other sources of supply. According to sources, last week, the largest national refiner suddenly made large purchases of several million barrels of crude oil from the United States and the United Arab Emirates.: it should be delivered relatively quickly.
In accordance with the deadline set for Putin to end hostilities in Ukraine, secondary sanctions may be imposed on buyers of Russian oil on Friday.
“Secondary sanctions and duties for those who pay for this conflict — China, India and Brazil — by buying oil produced by Russia are the obvious next step in trying to end this conflict,— Matt Whitaker, the U.S. representative to NATO, said in an interview with Bloomberg Television. ”It's really hitting the right place, and it's about their main source of income, which is selling oil to these countries."
Trade negotiations
The increase in tariffs by Trump stunned India — after all, it happened after several months of negotiations. The president escalated the anti-India rhetoric by going over its taxes and other barriers to American goods. He also criticized the country's purchases of energy resources from Russia and participation in the BRICS, and in particular, participation in the bloc's search for alternatives to the US dollar.
The Indian government has stated that it intends to continue negotiations with the United States in the hope of achieving a reduction in duties. India is considering increasing purchases of natural gas from the United States and increasing imports of communications equipment and gold.
Officials believe these steps will help reduce India's trade surplus with the United States, which is a major concern for Trump. According to the IMF, last year the US trade deficit with India amounted to about $43 billion, which is the 11th largest indicator. But there are many problematic issues: for example, Modi is opposed to opening up sensitive industries such as agriculture and dairy to the United States.
Relations between Modi and Trump deteriorated during the second presidential term. After clashes earlier this year between India and Pakistan, Trump threatened to block access to U.S. markets if the countries did not cease hostilities. Trump claimed that his actions brought peace, and his opinion angered the Modi government.
Pressure on Russia
India has been targeted by Trump's concentrated efforts to end the conflict in Ukraine. The president promised to quickly put an end to the Russian special operation, but these efforts were thwarted by Putin, who put forward maximalist demands on Ukrainian territory and refused personal talks with Vladimir Zelensky.
Trump's growing disillusionment with Putin has led the former to recent threats to impose economic sanctions on Moscow. In the past, he proposed tougher sanctions, but then postponed them in the hope of continuing negotiations.
On Sunday, Trump told reporters that special envoy Steve Witkoff will visit Russia this week — on Wednesday or Thursday — for further talks. Tensions between Washington and Moscow escalated last week when Trump said he had nominated two nuclear submarines in response to “extremely provocative statements” by former Russian President Dmitry Medvedev.
