With US President Donald Trump signing the Lindsey O Graham Sanctioning Russia and Iran Act shortly after Congress cleared it, policy watchers suspect he would use it to nudge India towards a bilateral trade agreement that is yet to be concluded. Just the other day, Commerce and Industry Minister Piyush Goyal said India was waiting for Washington to offer a preferential rate in comparison to the competition. But that flexibility and sovereignty in decision-making could be under test, as the sanctions Act authorises Trump to impose up to 100 percent tariff on India and four other big buyers of Russian energy, arguing their decisions are fueling President Vladimir Putin’s war machine against Ukraine. Why, then, target India alone?
Data put out by the Centre for Research on Energy and Clean Air shows that between December 2022 and August 2026, China imported about 50 percent of Russia’s crude, India 37 percent, while Turkey and the European Union were next in the pecking order at 5 percent each. With Trump expected to treat Xi Jinping with pomp at the White House this week, chances of playing the tariff game with the Chinese President are next to negligible. He notably did not penalise Beijing when he doubled the levy on New Delhi to 50 percent last year over Russian buy before he rolled it back. Another round of tariffs on India could draw a similar cold stare. As for Turkey and the EU, their volumes of Russian imports are way too small compared to India’s exposure.
India’s initial terse response to the legislation, warning that the measures could have implications for both bilateral ties and global energy markets, suggested it was prepared for any eventuality. Energy security for 1.4 billion citizens is paramount, the foreign office said, adding it would continue to pursue this objective through diversified sourcing and on the basis of evolving market dynamics. Interestingly, India had largely tapered off Russian crude imports earlier this year before Trump’s disastrous war with Iran opened that spigot once again. Since Trump's desperation for victories before midterm elections on November 3 is showing, India would be best placed to wait it out and take the bilateral deal call after the poll, based on the new realities in the US Congress.
