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Amid the strain in ties between Delhi and Washington following US punitive tariffs on India over its purchase of Russian oil, Union Finance Minister Nirmala Sitharaman said Friday that Delhi will continue to buy oil from Moscow because India’s oil purchases are driven by economic and commercial considerations.
She said the impact of 50 per cent tariffs imposed on Indian goods by the Trump administration will be offset to a certain extent by the Goods and Services Tax (GST) reforms, which included simplification and reduction of indirect tax rates on numerous items. The government, she said, is also working on measures to “handhold” those hit by the high US tariffs.
“Whether it is Russian oil or anything else, it’s our decision to buy from the place which suits our needs whether in terms of rates, logistics, anything. So, where we buy our oil from, especially (it) being a big-ticket foreign exchange-related item where we pay so much… we will have to take a call which (supply source) suits us the best. So, we will undoubtedly be buying it,” Sitharaman said in an interview with TV news channel CNN-News18.
India is the world’s third-largest consumer of crude and depends on imports to meet around 88 per cent of its requirement. Russian crude, which usually comes at a discount, has helped India save foreign exchange worth billions of dollars over the last three years.
Sitharaman’s remarks came on the day Brazil’s President Luiz Inacio Lula da Silva called a virtual meeting of BRICS leaders on September 8 to figure out a response to the Trump administration’s tariffs.
India and Brazil top the list at 50 per cent, and Delhi has decided that External Affairs Minister S Jaishankar will attend the virtual meeting.
Given the optics of the summit, the thinking in Delhi is that participation, at this stage, should only be at the level of the External Affairs Minister. In the West, the BRICS and SCO are viewed as anti-Western groupings. Delhi prefers to call them “non-Western groupings”.
According to Brazilian officials, Lula wants discussions not only on the tariffs imposed by the Trump government, but also in support of multilateralism.
While Brazil and India have been targeted by his administration, the US President has also called the BRICS “anti-American” and threatened to slap an additional 10% tariff on goods imported from these countries – he made that threat in July when leaders of the grouping gathered for the BRICS summit in Rio de Janeiro.
Trump put Brazil in the middle of his global trade war, threatening to impose higher tariffs unless the country’s Supreme Court immediately halted the trial of former President Jair Bolsonaro on the charge of attempting a coup. Bolsonaro’s trial is underway and the US has revoked the visa of Brazil’s Supreme Court judges and imposed sanctions on the judge leading the proceedings against the right-wing former President.
Last month, Lula told the Reuters news agency, “What President Trump is doing is tacit – he wants to dismantle multilateralism, where agreements are made collectively within institutions, and replace it with unilateralism, where he negotiates one-on-one with other countries.”
Lula dialled Prime Minister Narendra Modi a day after Trump announced an additional 25 per cent tariff on India over its purchase of Russian oil. The two discussed enhancing cooperation in trade.
