RUSSIAN OIL: INDIA IN AN UNENVIABLE SNARL

INDIA international trade is in turmoil as never before.

- GURBIR SINGH

The 50% tariff on Indian exports imposed by the US administration is beginning to bite. And Donald Trump continues to add confusion claiming Prime Minister Modi has agreed to taper off purchases of Russian oil.

India’s goods exports to the US fell precipitously from $8.8 billion in May 2025 to $5.5 billion in September, marking a 37.5% drop over the four-month period. The impact of these over-the-top US duties is worse than it seems as it has hit the small, labour-intensive industries the hardest. These include textiles, gems and jewelry, leather and engineering goods.

The 50% tariffs were implemented in two stages. The ‘reciprocal tariff’ imposed on Indian goods on 7 August; and an additional 25% levy on 27 August in retaliation against India continuing to buy Russian oil.

The drop in exports have also negatively impacted India’s trade deficit - the gap between what we import and export - by widening to a 13-month high of $32.15 billion in September.

The logjam in trade negotiations between Indian and the US has in the last few months been dominated by US’ insistence that, India being the second largest importer of sea borne oil from Russia, is funding the latter’s Ukraine war; and this should stop if India wants easier access to US markets.

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