The United States has armed itself with the authority to impose tariffs of up to 100 per cent on countries that continue to purchase Russian oil and gas.
In yet another assertion of its economic and geopolitical leverage, the United States has armed itself with the authority to impose tariffs of up to 100 per cent on countries that continue to purchase Russian oil and gas. The measure, ostensibly aimed at squeezing Moscow’s revenues, could have serious consequences for countries such as India, which remain heavily dependent on imported energy. The US legislation gives President Donald Trump the power to impose such tariffs on major buyers of Russian energy, including India and China. For India, the timing could hardly be more difficult. New Delhi has consistently maintained that it does not support Russia’s military action in Ukraine and has repeatedly called for dialogue and diplomacy to resolve the conflict. At the same time, India has sought to protect its vital energy interests by maintaining diversified sources of crude oil. Russia has emerged as an important supplier because its crude has, at various points, been available to Indian refiners at competitive prices. India’s dependence on imported crude is substantial: more than 88 per cent of its crude oil requirements are met through imports, while Russian supplies currently account for nearly half of those imports. The circumstances surrounding India’s energy choices have also changed dramatically. The prolonged conflict in West Asia has disrupted established energy flows and sharply increased uncertainty in global oil markets. Traffic through the strategically vital Strait of Hormuz has fallen dramatically amid the continuing US-Iran confrontation.
Against this backdrop, asking India to substantially reduce Russian oil purchases without providing reliable and economically viable alternatives raises a fundamental question about the practical consequences of such a policy. The objective of weakening Russia may be understandable, but secondary tariffs on countries such as India risk transferring a significant part of the economic burden to American partners and to consumers in the wider global market. There is also an element of contradiction in the argument. If Russian crude is removed from international markets without adequate replacement, global supply could tighten further and prices could rise. That would increase the cost of energy for importing countries, while potentially undermining the very economic stability that sanctions are intended to protect. The repercussions would not necessarily remain confined to the energy sector. Any substantial additional tariff imposed on Indian exports to the US could affect sectors that depend heavily on access to the American market. Garments, leather, engineering goods, steel and a range of consumer products could face greater competitive pressure. The consequences could extend to employment, export earnings and the country’s external balance. The larger issue goes beyond the immediate dispute over Russian oil. A rules-based international order cannot be strengthened by compelling third countries to bear disproportionate economic costs for conflicts in which they are not direct participants. Strategic partnerships are sustained by mutual respect and accommodation, not by coercive economic instruments. If Washington expects India to remain a reliable strategic partner, it must also recognise India’s legitimate concerns over energy security, economic stability and strategic autonomy. A policy that seeks to punish India for pursuing those interests may ultimately create friction where greater cooperation is needed.