Donald Trump isn’t treating India well. He puts Pakistan above India; marks us out for buying Russian oil and is holding up the trade deal till the US is allowed access to India’s agriculture sector. Most of these things are non-negotiable for the Modi government but it still doesn’t make life easier.
Let’s take oil first. Trump slammed a 25% tariff on India for buying the Russian oil. Now he has sanctioned Lukeoil and Roseneft from selling their stuff to the world. The two together account for 53% of all oil which Russia exports. Roseneft has a share of 34% on the oil we import from Russia. The 5-6 billion dollasr which India saves from buying Russian oil is already offset by the 25% additional tariffs of the United States.
It’s now well-known that sanctions are hardly a deterrent for India to buy Russian oil. It’s the companies which are sanctioned and not the oil itself which means that there are always intermediaries through whom the oil could be routed to the importing countries’ ports. The fleets which carry them have tampered GPS which throws any surveillance in disarray. The flags on these ships are misleading. These intermediaries look for sea routes where the surveillance is minimal. There is this another measure where oil is rather transferred from one to another ship or is mixed to avoid detection.
So it’s not hidden from anyone that sanctions have little effect on transactions between the buyers and sellers. China and India, the two largest oil importers of Russian oil, anyway don’t use dollars in transactions. They do it in local currency. The entire SWIFT, insurance chokepoints, facilitating banks are completely bypassed. If the US still take the sanctions route it’s just to browbeat the importing country from ceding ground or submitting to an unfavourable deal. Like India perhaps has done in agreeing to this 10-year defence framework deal with the United States. It’s nothing but a coercion to buy US weapons even if there are better options. After all, why should anyone opt for US arms which has been completely outclassed by the Russians in the Ukraine War.
The irony is that the West, or let’s say the United States and the European Union, themselves ignore sanctions while doing trade with Russia. European Union last year had a $70 billion trade with Russia while the United States itself did it to the tune of $5.6 billion dollars.
Donald Trump has now announced that India-US trade deal would soon be clinched and that India would reduce buying Russian oil to the minimum.
The United States has long-eyed India’s agriculture sector which on its own is exceptional as it brings food to the table of 1.40 billion Indians and still manages to export $51.9 billion dollars annually abroad. The US wants this market to open up for its multinationals. The Modi government has resisted it for good reasons because our farmers have done nothing to deserve this disservice. One would watch closely if and when the trade deal between the two countries happen and whether agricultural concessions from India are a part to it.
Trump’s claim that India would almost stop buying Russian oil doesn’t look credible. In doing so, India would lost a time-tested friend in Russia which is backbone of India’s defense architecture, not to say a welcome influence on China to which we remain wary. Then there is this matter of losing face in BRICS where India is one of the leading figures. Leaving multipolarity for a so-called ally which pampers Pakistan with complete disregard to India’s sentiments is self-defeating.
A bully can only be stared down. Ceding ground to them does little good. We have the example of China which deals with the United States in the language it understands. It has an ace in its Rare Earth sector which the United States simply can’t do without. Wish India too has one of such unbeatable card up its sleeve. We need to be self-reliant in as many fields as we could. Looking for crutches doesn’t help in real life as it doesn’t in international politics.
