Why U.S.-India Tariff Deal Was Reached but Russian Oil Imports Continue [Current Affairs Show]

Russia: "We will continue oil exports to India"
U.S. needs India to counter China

■ Broadcast: The Asia Business Daily 'So Jongsup's Current Affairs Show'

■ Host: Political Specialist So Jongsup

■ Director: PD Lee Kyeongdo

■ Guest: Reporter Lee Hyunwoo

The United States and Indian governments recently announced a trade agreement, but controversy is mounting over how the deal will actually be implemented. President Donald Trump stated that, on the condition that India halt imports of Russian crude oil, the United States would cut the tariff it imposed from 50% to 18%, and the Indian government also gave this a rousing welcome. However, as India has since failed to take concrete steps to suspend imports of Russian crude, doubts are spreading in the international community over whether the agreement can really be carried out as announced.

India continues imports of Russian crude...difficult to replace volumes

AP Yonhap News

President Donald Trump was confident that this agreement would serve as a turning point to sever the oil trade relationship between Russia and India, but the Russian side announced that existing exports are continuing, saying, "We have not received any suspension measures from the Indian government." The Indian government, for its part, is only promoting the fact of the tariff agreement with the United States and is not making public any specific follow-up measures related to suspending imports of Russian crude oil.

There are also practical reasons why India finds it difficult to immediately halt imports. Refiners in India are already known to have signed contracts to import Russian crude oil covering volumes through the first half of this year. Even if an embargo were declared right away, it would be difficult to enforce in practice. In particular, Russian crude is estimated to account for about 30% of India's total crude oil imports.

Before the war in Ukraine, the share of Russian crude in India's imports did not even reach 2%. After the war broke out, however, Russia lost its European market due to Western sanctions and began supplying crude to China and India at prices more than 30% lower than international benchmarks, causing imports to surge. India is currently bringing in more than 1 million barrels per day of Russian crude oil, and there are concerns that cutting this off abruptly could paralyze its industries across the board.

President Trump announced that, in exchange for cutting off Russian crude, India would instead import Venezuelan crude oil, where the United States has significant influence, but critics point out that Venezuela simply lacks the capacity to supply enough. Venezuela's daily crude oil production is around 900,000 barrels, which is far from sufficient to replace the Russian crude volumes imported by India. In reality, the volume that can be supplied to India immediately is only about 400,000 barrels per day.

U.S. sees ties with India as crucial to counter China

Associated Press and Yonhap News Agency

India's reluctance to actively participate in sanctions against Russia is rooted in the complex strategic relationship between Washington and New Delhi. From the U.S. perspective, India is a key partner capable of balancing China in the Asia-Pacific region. For that reason, many analysts believe it would have been difficult for Washington to force India to fully join sanctions against Russia. Since the Cold War, India has pursued a policy of non-alignment between the United States and the Soviet Union, and it still maintains an independent course that puts its own national interests first.

In fact, to contain China, the United States built the "Quad" framework together with Japan, Australia, and India, and is known to have invested considerable diplomatic effort to bring India into the group. While India's reliance on the United States has increased due to border disputes with China and other issues, New Delhi has simultaneously maintained the stance that "if we do not like what the United States is doing, we can always choose another option." India's weapons systems also form an unusually complex structure by global standards, as it has imported arms from a wide range of countries, including the United States, Russia, and European nations, whenever needed.

A recent case in which India was considering purchasing U.S.-made F-35 fighter jets but pivoted to the French-made Rafale after President Trump's tariff pressure intensified vividly illustrates this diplomatic balancing act. When relations between President Trump and Prime Minister Narendra Modi soured, India moved to open a direct air route with China and hosted high-level Chinese officials, which is also interpreted as part of the same strategy.

Reactions within the United States are mixed. Some argue that India, through a calm diplomatic strategy, secured a favorable deal against President Trump. Unlike the European Union (EU), Japan, and South Korea, which concluded tariff agreements alongside pledges of large-scale investment in the United States, India is assessed to have made no major concessions other than on the issue of Russian crude oil. Although President Trump applied heavy pressure on India early in his term and even hinted at closer ties with Pakistan, the Indian government did not overreact; instead, it dragged out the talks and negotiated over time. Because of this, India's strategy is sometimes cited as a "best practice" for middle-income countries negotiating with the Trump administration.

The negative assessments, by contrast, focus on the fact that the contents of the agreement remain opaque. On his social media, President Trump claimed that India would import more than 500 billion dollars' worth of American products going forward (about 762 trillion won), but the Indian government has not even commented on this. If President Trump's statement is accurate, there are concerns that it could place a huge burden on the Indian economy. Given that India's gross domestic product (GDP) last year was around 4 trillion dollars, 500 billion dollars is equivalent to one-eighth of the entire economy. Critics also point out that the Indian government is fueling domestic controversy by highlighting only the parts of the deal that are favorable to India while withholding disclosure of disadvantageous terms.

The outcome of the tariff negotiations between the United States and India carries implications for other countries, including South Korea. In particular, South Korea is cited as the first country to come under renewed tariff-hike pressure after President Trump announced a trade agreement, and industries around the world are on high alert. Although India's negotiations proceeded slowly, the terms revealed so far lead many to evaluate the agreement as relatively favorable compared with those of other Asian allies. As some observers interpret the pattern of the Trump administration as one in which it issues strong threats at the outset but becomes more flexible over time, there are growing expectations that India's case will serve as an important reference point in future tariff negotiations.

This content was produced with the assistance of AI translation services.