India’s Oil Profits Fall as Trump’s 50% Tariffs Take Effect

India’s Russian oil gains are also dwindling rapidly, with the 50% tariffs on Indian products enacted by former U.S. President Donald Trump coming into effect on Wednesday

ContentsExport Industries Face Massive LossesIndia Defends Russian Oil TradeIndia Faces Strategic PressureThe action has caused major alarm within India’s labor-intensive sectors and led to tension between New Delhi and Washington.

Export Industries Face Massive Losses

Trade analysts foresee that India’s exports may reduce by more than 40% in the current financial year. That would translate to a loss of $37 billion, and it would directly impact industries such as textiles, jewelry, and gems. These industries employ millions of people, particularly in rural areas, and they are currently experiencing profound shocks.

Prime Minister Narendra Modi has not spoken out publicly, but mounting political pressure is increasing. In Bihar, a significant rural state that is going to be elected, there is an increasing concern among the voters. In turn, the government is vowing tax breaks, such as a cut in the goods and services tax by October.

This White House decision comes after India increased its oil imports from Russia. U.S. officials claim such purchases undermine the world’s attempts to pressure Moscow after the conflict in Ukraine.

India Defends Russian Oil Trade

India has dramatically increased its importation of oil from Russia since 2022, and currently, virtually 40% of its overall crude intake is Russian. Firms such as Reliance Industries have won oil at discounts of up to 7% below the world prices. Having imported approximately 2 million barrels of Russian crude every day, the abrupt stop would not be manageable. Internal estimates reveal that the cost of oil will run high to about $200 per barrel in the event that India quits.

Indian authorities demanded cheap energy. The foreign ministry demands that these deals ensure Indian consumers are not vulnerable to unpredictably global markets. Meanwhile, diplomats charge the U.S. with hypocrisy, noting that America still buys Russian commodities such as uranium and fertilizers.

India Faces Strategic Pressure

U.S. Treasury Secretary Scott Bessent has described Indian oil purchasing as profiteering. His latest statements have led to more tension between the two nations. Both Russia and the U.S. are now putting New Delhi in the hot seat.

India also requires Russian defense, energy, and diplomatic assistance. Nevertheless, the U.S. is still its most significant strategic partner. Modi is supposed to meet the leaders during the Shanghai Cooperation Organisation summit, but no trilateral negotiations with China and Russia are scheduled.

Other nations, such as Vietnam, Mexico, and Turkey, are examining India’s lost market share with new tariffs in place. Analysts have cautioned that India may incur long-term losses despite future tariff removal.