Sign in Subscribe
Agricultural products

India, US Trade Deal Elusive as Trump's Tariffs Escalate Tensions

Strategic Insights

— 1 min read

Amid ongoing trade talks between India and the US, the relationship has taken a downturn due to President Donald Trump's recent statements announcing a 25 per cent tariff hike on Indian goods and an unspecified "penalty" for defense and energy imports from Russia. The Ministry of External Affairs (MEA) responded strongly, labeling the US move as "unjustified and unreasonable" and stating that India would take "all necessary measures" to safeguard its national interests and economic security.

Key Takeaways:

  • The MEA called out the US and European Union for continuing trade with Russia, emphasizing that India's imports were necessary due to global market circumstances and not a vital national compulsion.
  • The Indian statement drew a parallel with Europe's significant trade with Russia, citing a bilateral trade of Euro 67.5 billion in goods and an estimated Euro 17.2 billion in services trade in 2023.
  • External Affairs Minister S Jaishankar addressed a BIMSTEC traditional music festival, emphasizing the importance of a fair and representative global order.
  • Indian refiners have already begun to cut down on Russian oil imports, with July deliveries falling 24 per cent from June levels and volumes down 23.5 per cent from last year.
  • Think-tank GTRI noted that China, not India, is the largest buyer of Russian oil, importing $62.6 billion worth in 2024 compared to India's $52.7 billion.
  • The Indian government and stakeholders are engaged in deliberations to manage the situation and assess choices for India, with a pre-emptive reduction in Russian oil imports signaling a shift in the country's energy strategy.

Statistics:

  • July deliveries of Russian crude to Indian refiners fell 24 per cent from June levels and 23.5 per cent from volumes delivered in July last year ([Kpler data](ref)).
  • India's share of Russian crude in its oil import basket in July contracted to around 33.8 per cent from June's 44.5 per cent ([Kpler data](ref)).
  • China imported $62.6 billion worth of Russian oil in 2024, compared to India's $52.7 billion ([GTRI data](ref)).

Sources:

  • Ministry of External Affairs (MEA) statement on July 31 ([MEA](ref))
  • Press Trust of India (PTI)
  • Think-tank GTRI
  • Contify.com
  • Kpler (tanker tracking data)
  • IE Online Media Services Pvt. Ltd.

Read more