The External Affairs Ministry of India issued a statement on Thursday indicating that the country is seeking to “expand our energy procurement” from the United States, following President Donald Trump telling reporters the day before that New Delhi is planning to limit its Russian oil purchases.
India, a longtime ally of the Soviet Union and Russia, dramatically expanded its purchases of Russian crude oil in the immediate aftermath of Russia’s full-scale invasion of Ukraine 2022, capitalizing on discounted prices resulting from European sanctions. India has prodigious oil refining capabilities, but very little domestic crude, making it heavily reliant on crude imports. In addition to meeting domestic demand, India profits handsomely from selling refined oil products, such as gasoline and diesel, abroad — including to countries such as Ukraine which recently stopped buying Russian crude refined in India to prevent the money from funding its own invasion.
As a result, the country has faced intense pressure, especially from the United States, to stop funding the Russian economy and, indirectly, the invasion of Ukraine. Indian officials have repeatedly responded to this pressure by noting that European leaders made their countries heavily dependent on Russian natural gas for their heating needs and do not face similar criticisms, accusing them of holding India to a double standard.
While the administration of former President Joe Biden did little to engage India on this issue, President Trump launched a global recalibrating of America’s trade relationships this year that included imposing tariffs on Indian goods and addressing points of contention in the bilateral relationship. Trump publicly declared his intention on multiple occasions to convince Prime Minister Narendra Modi to stop buying Russian oil and contribute to ending the three-year-old invasion, but India has not relented at press time. The White House has since imposed an onerous 50 percent tariff on India as a pressure campaign to make it stop supporting Russia.
On Wednesday, Trump announced that he believed Modi would finally begin to replace Russia as a major source of oil.
″[Modi] assured me today that they will not be buying oil from Russia. That’s a big stop.” Trump told reporters in the Oval Office. “Now we’ve got to get China to do the same thing.”
India’s foreign ministry neither confirmed nor denied Trump’s claims. It did indicate that the government is looking to buy more American oil.
“India is a significant importer of oil and gas. It has been our consistent priority to safeguard the interests of the Indian consumer in a volatile energy scenario. Our import policies are guided entirely by this objective,” External Affairs Ministry spokesperson Randhir Jaiswal said in an official statement.
“Ensuring stable energy prices and secured supplies have been the twin goals of our energy policy,” the statement continued, including “diversifying as appropriate to meet market conditions.”
“Where the U.S. is concerned, we have for many years sought to expand our energy procurement. This has steadily progressed in the last decade,” the statement concluded. “The current Administration has shown interest in deepening energy cooperation with India. Discussions are ongoing.”
India very rapidly increased its reliance on Russian oil after Russian strongman Vladimir Putin launched his full-scale invasion of Ukraine in February 2022. As of September, data analysis firms show that Russia is India’s top oil supplier, exporting 1.6 billion barrels per day (bpd) to India last month. That number marks a minor dip from the 1.7 million bpd India bought from Russia in August, but this change does not affect Russia’s status as India’s top supplier.
The news agency Reuters reported on Thursday, citing anonymous “people familiar,” that Indian oil refineries are actively seeking to replace their Russian suppliers with other countries.
“Indian refiners said they have not been formally told by the government about stopping Russian oil purchases, sources said,” according to Reuters. “The sources said it would be difficult to immediately stop buying Russian oil as a sudden switch to buying other crudes would drive up global oil prices and threaten to stoke inflation.”
Trump’s 50 percent tariff on Indian imports into America took effect in August. Economic analysts noted that the tariff effectively erases any benefit from buying discounted Russian oil, costing India an estimated $37 billion in the next year, while the discount from Russian oil is expected to total around $17 billion in the next year.
“Looks like we’ve lost India and Russia to deepest, darkest, China. May they have a long and prosperous future together!” Trump lamented in a message on his website, Truth Social, in September, indicating little progress in negotiations at the time with India on trade.
The Indian government has consistently put on an optimistic face regarding the talks to eliminate the 50 percent tariffs in the past two months. Following a round of talks in mid-September, the Indian Commerce Ministry claimed the talks were “positive” and “forward-looking.” Commerce Minister Piyush Goyal began predicting soon afterward that talks would yield a mutually beneficial agreement by November.
“I do hope that things will get back on track soon and we will conclude a bilateral trade agreement by autumn, November or so, as was discussed by our two leaders in February,” he said at an investor conference in Mumbai at the time.
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