Trump’s Pressure on India Over Oil Imports from Russia Creates Tension

US President Donald Trump, despite often referring to Indian Prime Minister Narendra Modi as a "friend," has not shown any leniency towards India since his second term began in January.

On August 27 this year, the US imposed a 50% tariff on India, and the effects are already evident. India's exports to the US dropped by 20% in September, and over the past four months, the decline has reached 40%.

Ajay Srivastava, Director of the Delhi-based research organization Global Trade Research Initiative, believes that India has been the most affected by Trump’s tariff policies. He further predicts that the decline in exports will continue to worsen in the coming months.

Meanwhile, during a press conversation at the White House, Trump was heard praising Modi, saying, "Modi is a great guy. He likes me." He later laughed and added, "I don’t want you to use the word 'like' in any other way. I don’t want to ruin his political career."

Trump also claimed that Modi had assured him that India would stop buying oil from Russia.

In response, Indian media questioned whether such an assurance had really been given by Modi's government, creating domestic controversy. Many now wonder if President Trump is dictating India's foreign policy decisions.

Indian opposition leader Rahul Gandhi posted on X (formerly Twitter) on Thursday, accusing Modi of fearing Trump. He stated, "The Prime Minister is allowing Trump to decide India’s oil imports, and even sending congratulatory messages despite being ignored. Finance Minister’s US trip was canceled, and Modi didn’t protest Trump’s demands about Operation Sindoor."

India's Ministry of External Affairs spokesperson, Randhir Jayaswal, responded to questions on Trump’s statement during a press conference on Thursday evening. He said, "As far as I know, there has been no such discussion between Prime Minister Modi and President Trump."

Previously, Jayaswal had issued a statement explaining that India formulates its energy import policies in the interest of its consumers. However, Trump reiterated his claim that India would stop buying oil from Russia.

Despite this, India has not directly contradicted Trump’s assertion. Ajay Srivastava explained, “Trump made this claim during ongoing trade talks between India and the US. Naturally, when a powerful country like the US makes such a statement, India must respond cautiously. However, India should now be clearer in its response.”

Russia and India: A Historic Partnership

Regarding Trump's claim about stopping oil imports from Russia, former Indian Foreign Secretary Kanwal Sibal reposted the video on X, stating, “The problem lies in dealing with Trump. He confuses things and interprets them in his own way.”

Trump had previously pressured India to stop oil imports from Iran during his first term, but the comparison between Iran and Russia is flawed. Russia has been a long-time strategic partner of India since the Cold War.

Michael Kugelman, Director of the South Asia Institute at the Wilson Center in Washington, said, "It’s hard to believe Modi promised to stop importing oil from Russia." He explained that while India ceased oil imports from Iran under US pressure, Iran is not as close a partner as Russia, and India had alternative suppliers then, which it does not have now.

India Faces Growing Dilemma

International politics expert Nirupama Subramanian, who has reported from Pakistan, stated, “I believe Trump is not only harming India but also creating instability internationally. Based on his first term, it was impossible to predict he would go this far.”

India’s ties with Russia have been strong and stable for over seven decades. India’s Foreign Minister Dr. S. Jaishankar had also noted that the relationship between the two countries has remained steady in global politics over the last 50 years.

During the Cold War, India identified itself as non-aligned, but in 1971, when the US supported Pakistan in the war, India grew closer to the Soviet Union. Over the past three decades, India's cooperation with Russia in areas like space, nuclear energy, and defense has increased.

At the same time, India’s relationship with the US has improved in recent decades, reducing India’s dependence on Russia for defense.

Trade between Russia and India Hits Record

In the last fiscal year (which ended on March 31, 2023), trade between India and Russia reached a record $68.7 billion. India’s imports from Russia amounted to $63.8 billion, while its exports to Russia totaled just $4.9 billion.

Russian investments in India include energy, pharmaceuticals, banking, railways, and steel. India also has investments in oil, gas, and pharmaceutical sectors in Russia. India buys oil from Russia at a discount compared to global market rates, although the price difference has been narrowing.

According to Bloomberg, as of October 15, India was purchasing oil from Russia for $2.5 less per barrel than the benchmark crude. However, the difference in price was more than $23 per barrel in 2023.

Economic Implications of Trump’s Pressures

Credit rating agency ICRA reports that in the fiscal year ending in March 2023, India saved $3.8 billion on crude oil imports from Russia due to the discount.

On the export front, the US is one of India’s largest markets. Last year, India exported $87 billion worth of goods to the US.

Nirupama Subramanian noted that the situation is far from simple for India. If Modi continues to buy oil from Russia, India risks straining its relationship with its biggest trading partner, the US. On the other hand, halting Russian oil imports would undermine India's long-standing partnership with Russia.

According to Bloomberg Economics, Trump's tariffs could reduce India's exports to the US by 52%, potentially reducing India's GDP by 0.8% in the medium term.

Standard Chartered estimates that if India stops importing oil from Russia, its annual import bill could increase by $4 billion to $6.5 billion.

Ajay Srivastava highlighted that from April to August this year, India imported $19.8 billion worth of oil from Russia, down 11.2% from the same period last year. Meanwhile, India’s oil imports from the US doubled, reaching $5 billion during the same period, an increase of 78.6%.

Thus, while India has reduced its oil imports from Russia and increased its imports from the US, Trump remains dissatisfied, creating a dilemma for India.