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US President Donald Trump’s push for a ceasefire in Ukraine did not yield results, with Russian President Vladimir Putin clearly not yielding. In the run up to the highly talked-up meeting in Alaska, Trump rolled out the red carpet for Putin. In the end, though, the Russian President seems to have come out as a clear winner, having got his moment in the spotlight when he transformed from a global pariah to one who got to share the stage with the leader of the world’s most powerful country. In return, he gave pretty much nothing, at least for now, it would seem.
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Previously Trump had threatened a tougher approach to Russia, with warnings of more sanctions if Moscow ignored calls for a ceasefire. He has not followed through yet, and it remains to be seen if he does anything now. There are no dates for a future summit, nor agreement on whether anything at all was decided between the two sides. And in a briefing that followed, it was Putin who inexplicably got to speak first, and a weary-eyed Trump spoke later. The two leaders took no questions from the dozens of reporters present.
The apparent failure of the talks may come as a relief for Ukrainian and European leaders, who were worried that Trump would yield to Putin’s demands and follow up on his earlier talk of swapping land. New Delhi too had one eye on America’s frigid outpost over 15,000 kilometers away, to see if anything came out of the spectacle that could impact India’s prospects.
President Donald Trump greets Russia’s President Vladimir Putin in Alaska on Friday. (Photo: AP)
India caught in the cross-fire
There was some hope in India that if Trump and Putin reached a deal of some kind, that outcome would provide relief to New Delhi with respect to the secondary tariffs imposed on India. There was a belief here that the 25 per cent additional punitive tariff could possibly go away if the Trump administration believed that it was making some kind of progress with Putin on stopping the war.
That hope, although relatively diminished, may still be there to some extent as both Trump and Putin—while saying there was no deal yet—indicated some progress in the Alaska talks. Only time will tell whether it was just lip service in front of the global media, or an indication that the needle actually moved a little. New Delhi would still be hoping for the best-case scenario—rollback of the 25 per cent additional tariff, or at least the postponement of the August 27 deadline when the extra tariff is slated to take effect.
On the flip side, there was also the worst-case scenario for India: if something came out of the meeting that looked really bad for Trump, personally or politically, then India would have to pay a price for that. This is despite the fact that the secondary tariffs, apart from being a tactic to exert pressure on Moscow through New Delhi, are also evidently about gaining leverage on India for not having concluded a trade deal with the US on Trump’s terms and for having publicly debunked the American President on his claims of having brokered a ceasefire in the four-day India-Pakistan military conflict in May.
When Russia invaded Ukraine in February 2022, Moscow’s share in New Delhi’s oil imports was less than 2 per cent. With much of the West shunning Russian crude following the invasion, Russia began offering discounts on its oil to willing buyers. Indian refiners were quick to avail the opportunity, leading to Russia emerging as India’s biggest source of crude within a matter of months, displacing the traditional West Asian suppliers. Russia now accounts for 35-40 per cent of India’s total oil imports by volume. Notably, the US had encouraged India to buy Russian oil barrels at the time as it wanted energy markets to remain stable and well-supplied, according to various US officials who served in the Joe Biden administration.
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But now, Indian refiners’ hefty imports of Russian crude have surfaced as a major irritant for a frustrated Trump administration in its relationship with India.
Uncertainty on the road ahead
There are two worrying statements for India that came in the context of the Alaska talks. Trump, in an interview with Fox News Friday, said that Russia “lost” India as an oil client (after he imposed secondary tariffs on New Delhi), while discussing on Friday the economic aspect of the Russian leader coming to the negotiating table. Earlier in the week, he’d said that the secondary sanctions on India had forced Putin to agree to the talks.
“Certainly, when you lose your second largest customer and you’re probably going to lose your first largest customer, I think that probably has a role,” he said. India is Russia’s second largest customer for crude, while China, despite being the largest, has so far escaped secondary tariffs or sanctions.
On Wednesday, US Treasury Secretary Scott Bessent said that Washington could raise its current 25 per cent secondary tariff on India if Trump’s meeting with Putin failed to make headway on Ukraine. He also asked the European Union to impose a similar secondary levy on India. “We put a secondary tariff on Indians for buying Russian oil, and I could see if things don’t go well (in Friday’s Trump-Putin meeting), then sanctions or secondary tariffs could go up,” Bessent told Bloomberg Television.
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New Delhi has called the targeting of India over the purchase of Russian oil “unjustified and unreasonable” and said these imports began as its traditional supplies were diverted to Europe, with the US having “actively encouraged such imports by India for strengthening global energy markets stability”. India has maintained over the years that as a country that depends on energy imports, it will buy oil from wherever it gets a good deal, as long as the oil is not under sanctions. To be sure, Russian oil is not under sanctions, and is only subject to a price cap imposed by the US and its allies that applies if Western shipping and insurance services are used for transporting the oil.
While there has been a slowdown in oil imports from Russia—India’s largest supplier of crude oil—in recent weeks, which was being seen by some industry watchers as a signal from New Delhi to Washington, officials in India’s refining sector maintain that the reduction is primarily due to discounts on Russian crude narrowing considerably, and not due to threats by the US or any other reason. Top executives at India’s public sector refiners have clarified that they have not received any direction or indication from the government with respect to oil imports from Russia, and the additional 25 per cent US tariff has had no bearing on their Russian oil import strategy, which continues to be guided purely by economic and commercial considerations.
How India responds in the coming weeks and months would largely depend on how the US-Russia negotiations on Ukraine shape up, and the view Washington takes on its lately uneasy relationship with New Delhi.
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