Accused by Trump of financing the Russian war machine by purchasing energy from Moscow, India two days ago became the first country to be hit by additional tariffs imposed by the American president due to its commercial proximity to the Federation. Since the outbreak of the conflict in 2022, Moscow has supplied India with its crude oil at very low prices; since then, seaborne exports have only increased until India became, after China, the second largest importer of Russian black gold.
But it's not all Moscow's fault. Even before the energy deals, relations between Americans and Indians had deteriorated over the drift of the trade talks between New Delhi and Washington, which, as requested by Trump, was tasked with closing a trade deficit of $44 billion. With the negotiations stalled, with his usual capital letters on social media mimicking fists banging on the table, the American president announced that India would be hit with additional tariffs of 25%—on top of those already announced for everyone of the same level. Now, if Moscow doesn't reach an agreement with Washington for the negotiations, the US secondary sanctions against its trading partners could increase the rates to 100%.
First, it was Iraq and Saudi Arabia that filled Indian deposits. Then the anti-Russian sanctions issued by the West caused the price of the Kremlin's energy to collapse, which shrewdly offered its energy products to the most populous nation in the world at very low prices. "Just before the war began, crude oil from Russia accounted for 0.2% of India's imports. By May 2023, Russia was selling India more than two million barrels of crude oil a day, equal to about 45% of its imports," calculated the New York Times
.Today, 36% of total oil imports come from Moscow: Russia is now the country's main energy supplier, a trade flow that benefits both capitals. Reaching out to the Kremlin while the world was turning off its energy supplies due to the Ukrainian conflict was a political decision by New Delhi that sparked the ire of Kiev and its allies, but above all, a commercial and economic choice aimed at satisfying the growing needs of the 1.5 billion inhabitants of the world's third-largest oil consumer (according to Reuters calculations, India will overtake China in 2030).
As of today, it would be difficult for India to replace the product arriving from the Federation in the near future: it would leave a gap of millions of barrels that it is not yet clear who could fill. New Delhi has benefited not only from Russian discounts, but also from the new business of refined products that feeds the coffers of gigantic companies. One example is Reliance Group – the company that operates the largest refinery in the world, the one in Jamnagar – which has grown by 34% since the beginning of the war.
Indian oil companies refine part of Russian oil for domestic consumption, but earmark another portion (for example, for diesel) for export to Europe. The sanctions, in fact, do not affect Russian energy products refined outside Russia. In 2023, India exported nearly $87 billion worth of refined petroleum products, making it the world's second-largest exporter, according to figures from the National Bureau of Asian Research. And where does Russian crude refined by India end up? According to the Center for Research on Energy and Clean Air, it ends up in the very countries that have sanctioned Moscow: Europe, the United States, and the United Kingdom.
