Prime Minister Narendra Modi’s diplomatic woes are mounting as Russian President Vladimir Putin’s proposed visit to India on December 5 and 6 is approaching. US President Donald Trump is determined to ensure substantial reduction in Indian imports of Russian oil by November and this has been linked with the progress of the next round of India-US trade talks scheduled in Washington next week.
Already Trump has caused a deep embarrassment to the Indian PM by claiming on Wednesday that his good friend Narendra Modi had assured him that India would not be buying oil from Russia and that there was a little bit of process which would be over soon. This was immediately denied by the external affairs ministry on Thursday by stating that Modi had no talks with Trump on Wednesday. This was right factually by later the US President himself clarified that this was conveyed to him by the US ambassador designate Sergie Gor while briefing him on his long discussions with the Indian PM in New Delhi last week.
This part has not been denied by the external affairs ministry. In fact, the actual reality is that Narendra Modi must have given some assurance about reduction of Russian imports of oil but certainly that did not mean total stoppage. Trump, as usual, exaggerated the nature of conversation by stating that Modi had agreed to stop supplies. The main issue is that the US President, as a part of his deliberate policy is putting high pressure on Modi to take some concrete action on reduction of oil imports from Russia and this Trump has linked with the progress of the India-US trade talks, the conclusion of which is of special interest to the Indian Prime Minister.
The timing of all these pressure tactics on the Russian oil imports by India has become disturbing to the Indian PM who is making plans to have the annual bilateral talks with the Russian President in December next. On August 31 during the SCO summit in China, both President Putin and PM Modi had detailed discussions on continuing the oil imports and had even talked of expanding to new areas. Trump’s insistence on linking stoppage of oil imports from Russia with the progress of the India-US trade talks, has thus posed a big problem to Narendra Modi at this hour. The task before him now is how to balancing best the Indian interests by keeping both Putin and Trump in good humour.
Presently, India is having 50 per cent tariff hike on its exports to the US market. The original hike is 25 per cent and another 25 per cent was added by Trump in August this year as a penalty for importing oil from Russia which was helping Russia in financing war, according to Trump. If India stops importing oil from Russia, that will automatically lead to the withdrawal of the penalty of 25 per cent. Apart, this decision may help in facilitating the process in India-US trade talks towards a conclusive deal.
What is the ground position in oil imports from Russia by India.? India is the second largest buyer of crude oil after China and the Indian bilateral trade with Russia expanded in the last three years of Ukraine war only due to the high rise in oil imports which India got at a discounted price helping India to tackle the balance of payments problem to a significant extent. India can afford to reduce its imports at the big cost of its foreign exchange on the basis of the present crude oil market behaviour.
Bilateral trade between India and Russia reached a record high of USD 68.7 billion in FY 2024-25, nearly 5.8 times higher than the pre-pandemic trade of USD 10.1 billion. It comprises India’s exports worth USD 4.88 billion and imports from Russia amounting to USD 63.84 billion. This steep rise in bilateral trade in 2024-25 was mainly due to the higher imports of Russian oil and petroleum products during the year.
Major imports from Russia are dominated by oil and petroleum product, fertilizers, bituminous substances, mineral fuels, mineral waxes, machinery, equipment, precious metals and stones, wood, pulp and paper products, metals and vegetable oils. Both sides expect to reach the bilateral trade target of USD 100 billion by 2030.
President Putin himself is giving special emphasis to this summit with the Indian PM since by publicizing the partnership with a big country like India, he can show to the Global South and others his acceptability as a political leader, even after more than three years of war in Ukraine. President Putin is also interested in making India-Russia- China functioning as a troika despite reservations by the Indian PM.
In fact, the official level discussions on India-Russia collaboration are covering a number of areas including Indian participation in the resource exploration in the Arctic region, especially the Northern Sea Route, where the Russian scientists are already active. Talks will be held in ensuring more investments from Russia into some core areas. While the bilateral trade has expanded, the investments have stagnated. Russians are interested in making some breakthrough in this sector. President Putin and PM Modi are likely to give a fresh look at the possibilities of joint investment programmes during the December summit talks.
But, the core issue of the India-Russia talks is cooperation in energy including crude oil supplies. PM Narendra Modi’s hands are tied in this crucial sector as the Trump’s sword is hanging. President Putin is also monitoring all the latest developments following Trump’s Wednesday comment. Next few weeks show how the Indian PM takes his steps in dealing with Indian imports of oil from Russia as also what directions are given to the Indian delegation during the coming India-US trade talks. Much will depend on the Prime Minister’s expertise in protecting national interests in talks with both Russian and US leaders. (IPA Service)
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