US President Donald Trump stated on Friday that Russia has essentially lost India as a customer for oil after Washington announced sanctions against New Delhi for buying Russian crude. But he also intimated that he could hold back from imposing secondary sanctions on countries that still buy Russian oil.
The remarks by Trump followed New Delhi not yet announcing any cut or suspension of oil imports from Moscow even after the US imposed a 25 per cent tariff last month, in addition to a prior 25 per cent duty on Indian products. The extra tariff is scheduled to go into effect on August 27.
The US threatened to sanction Moscow and also other nations buying Russian oil if no measures were taken to stop the war in Ukraine. China and India are still the biggest customers of Russian oil.
"Well, he (Russian President Vladimir Putin) lost a client of oil, so to speak, that being India, which was doing approximately 40 per cent of the oil. China, as you are aware, is doing a tremendous amount.And if I were to do what is referred to as a secondary sanction, or a secondary tariff, it would be very disastrous for them. If I need to do it, I'll do it. Perhaps I won't have to do it," Trump said in an interview with Fox News while en route to Alaska for an important summit with Putin.
On August 6, Trump intensified his tariff measures against India, initially imposing an extra 25 per cent duty, which was later doubled to 50 per cent, citing New Delhi’s continued import of Russian oil.
India termed the action as "unfair, unjustified and unreasonable," warning that industries such as textiles, marine, and leather exports stand to be severely affected. Prime Minister Narendra Modi had previously stated that India would not succumb to economic coercion.
By taking this step, New Delhi became subject to the 50 per cent highest US tariff, tying it with Brazil. Russia, China, and other countries condemned Trump's strategy, terming it an illegal move aimed at pressuring India through trade.
India's state-owned refiners have apparently halted Russian oil purchases after Trump imposed tariffs, Bloomberg reported, although no official confirmation has been made by the Indian government.
On Thursday, Indian Oil Corporation chairman AS Sahney explained that India did not stop importing Russian oil and continues to do so solely on economic grounds.
India emerged as Russia's biggest buyer of oil in 2022 following Western nations imposing sanctions on Moscow over the invasion of Ukraine.
A State Bank of India report had shown that India's crude oil import bill might increase by USD 9 billion this year and USD 12 billion next year if Russian oil imports were stopped. The report also recommended that India might resort to Iraq—its key supplier before the war with Ukraine—and then Saudi Arabia and the UAE, as stopgap arrangements for Russian crude.
Kpler Ltd data indicate that Russian oil is being sold to Indian buyers at a discount, with European Union sanctions and the risk of US penalties constraining aggregate demand, Bloomberg said.
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