Can India diversify its oil sources?
India’s foreign ministry said on Monday that it began importing from Russia because traditional oil supplies were diverted to Europe after the outbreak of the Ukraine war.
India still sources crude oil from parts of the Middle East, such as Iraq, Saudi Arabia and the United Arab Emirates. The region accounted for 45 per cent of the country’s total imports in 2024.
According to Minister of Petroleum and Natural Gas Hardeep Singh Puri, India has diversified its sources of supply to about 40 countries. More supply is coming onto the market from Guyana, Brazil and Canada, he added.
So India could find other suppliers to meet its energy needs relatively easily. The question is cost – as none of India’s other alternatives offer the same price advantage as Russia.
What next for India?
The Indian government on Wednesday called the additional tariffs “unfortunate”.
“We reiterate that these actions are unfair, unjustified and unreasonable,” foreign ministry spokesman Randhir Jaiswal said in a statement, adding that India would take all actions necessary to protect its interests.
Jaiswal said India has already made its stand clear that the country’s imports were based on market factors and were part of an overall objective of ensuring energy security for its 1.4 billion people.
One analyst said the new tariffs put Prime Minister Narendra Modi in a bind.
“India is now in a trap – because of Trump’s pressure, Modi will reduce India’s oil purchases from Russia, but he cannot publicly admit to doing so for fear of looking like he’s surrendering to Trump’s blackmail,” said Ashley Tellis at Washington’s Carnegie Endowment for International Peace.
Reuters previously reported that India’s state refiners had paused Russian oil purchases.
Can the US do the same to China?
China is the biggest importer of Russian crude ahead of India. Türkiye is also a major buyer, and Trump has warned that countries purchasing Russian exports could face sanctions if Moscow fails to reach a peace deal with Ukraine.
But Trump could find it difficult to impose such tariffs on Beijing, Dr Susan Stone told CNA.
Dr Stone, Credit Union SA Chair of Economics at the University of South Australia, noted that US trade with China was five times larger than its trade with India.
“China’s been showing its willingness to retaliate, and of course, it has the economic heft behind it to make those retaliatory measures more painful, maybe than other countries to the US,” she said.
“So it’ll be interesting to see if the US threatens China, and then if it does, how that plays out.”
As part of a negotiating period with Beijing, Trump has placed 30 per cent tariffs on goods from China, a rate that is lower than the combined import taxes that India faces.
Ajay Srivastava, a former Indian trade official, told AP that Trump’s decision on India was “hypocritical” given that China buys more Russian oil.
“Washington avoids targeting Beijing because of China’s leverage over critical minerals, which are vital for US defence and technology,” he said.
https://www.channelnewsasia.com/asia/why-india-buys-russian-oil-us-tariffs-china-cna-explains-5282611
