The US administration, while keeping an eye on India's Russian oil imports, stated that India is diversifying its energy purchases and will make its own decisions. If India reduces its Russian oil imports, the additional 25% tariff imposed by the US could be removed, which would boost India's exports to the US.
Trade deal: US Trade Representative Jamison Greer said that India is diversifying its energy purchases and that buying Russian oil is not the basis of the Indian economy. He clarified that India will make its own decisions independently and the US is not dictating to any country with whom to maintain relations. He also indicated that if India reduces its Russian oil imports, the additional 25% tariff imposed by the US government could be removed, which would benefit India's exports to the US.
India and Russian Oil
Jamison Greer stated during a discussion at the Economic Club of New York that India has not always purchased this much oil from Russia. In recent years, India began buying Russian oil at a discount, but it is not the mainstay of the Indian economy. He added that India has now started taking steps towards diversification, and this is a positive sign. Greer also said that India is a sovereign nation and will make its own decisions. The US is not dictating any instructions in this matter.
US imposed 50 percent tariff
The US administration had imposed a 50 percent tariff on India, which included an additional 25 percent duty for the import of Russian oil. The Trump administration argued that India's purchase of Russian oil was fueling the Russia-Ukraine war. Due to this tariff, inflation was rising in the American market, and American consumers' grip on Indian products was being affected.
Greer stated that US trade with India is already worth 40 billion US dollars, and this tariff is also causing problems for the US. He also added that the US wants to ensure that pressure remains on Russian President Vladimir Putin and that efforts to end the war continue.
India's Energy Purchases
India states that its energy purchases are influenced by national interest and market dynamics. India began purchasing Russian oil at a discount after Western countries imposed sanctions on Russia. According to US officials, if India reduces its Russian supply, the US wants to see an increase in the supply of American oil in the Indian market. This would maintain balance in the global energy market.
Potential Impact on Trade and Tariffs
The changed tone from the US indicates that positive discussions on tariffs and trade may occur in the future. The additional tariffs imposed on India are also increasing pressure on American consumers as inflation rises. In such a scenario, the US Federal Reserve might reconsider cutting its policy rates. Meanwhile, if India reduces its Russian oil imports, the supply of American oil could increase, and the trade balance between the two countries could improve.
US-India Trade Dialogue
Jamison Greer stated that the US is engaging in discussions not only with India but also with China regarding Russian oil and other trade matters. The objective is to end the Russia-Ukraine war and maintain stability in the global energy market. He also added that if the war ends, new discussions regarding energy purchases from Russia are possible.
