INTERNATIONAL
Russian oil key to India’s growth amid US trade pressure - Economist
India defends Russian oil imports as US tariffs strain exports and growth while trade diversification efforts face time and impact limits. - ADOBE STOCK
INDIA cannot afford to stop importing Russian oil, a New Delhi-based economist said on Wednesday (August 27), as the U.S. government's doubling of tariffs on goods from India to as much as 50% took effect, escalating tensions between the world's two largest democracies and strategic partners.
AI Brief
Former professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University, Biswajit Dhar, said Russian oil is cheaper and therefore believes it would be "illogical" for India to add another layer of risk to its economy by giving up on it, especially at a time when U.S. tariffs are hurting exports, widening the current account deficit, and threatening the country's growth trajectory.
A punitive 25% tariff imposed due to India's purchases of Russian oil adds to Trump's prior 25% tariff on many imports from the South Asian nation and is expected to hurt growth in the world's fastest-growing major economy.
The immediate impact of U.S. tariffs on Indian exports appears limited but their secondary and tertiary effects on the economy pose challenges, India's finance ministry said in its July monthly economic review, released on Wednesday.
The South Asian nation is pursuing a diversified trade strategy to sustain its trade performance, but these initiatives will take time and may not fully address the shortfall that will arise in exports if current tariff rates persist, it said.
Your gateway to global news, insights, and stories that matter.
AI Brief
- India sees Russian oil as essential amid US tariffs that threaten exports and economic growth.
- A new 25% US tariff adds to earlier duties, deepening pressure on India's trade and current account.
- India is pursuing trade diversification, but results may take time and wont fully offset export losses if tariffs persist.
Former professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University, Biswajit Dhar, said Russian oil is cheaper and therefore believes it would be "illogical" for India to add another layer of risk to its economy by giving up on it, especially at a time when U.S. tariffs are hurting exports, widening the current account deficit, and threatening the country's growth trajectory.
A punitive 25% tariff imposed due to India's purchases of Russian oil adds to Trump's prior 25% tariff on many imports from the South Asian nation and is expected to hurt growth in the world's fastest-growing major economy.
The immediate impact of U.S. tariffs on Indian exports appears limited but their secondary and tertiary effects on the economy pose challenges, India's finance ministry said in its July monthly economic review, released on Wednesday.
The South Asian nation is pursuing a diversified trade strategy to sustain its trade performance, but these initiatives will take time and may not fully address the shortfall that will arise in exports if current tariff rates persist, it said.