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India saved $17bn by ramping up Russian oil imports, say analystsTrump’s new tariffs of up to 50% could slash Indian exports to US by $37bnLabour-heavy sectors like textiles, gems, and jewellery face major job lossesIndia open to buying more US energy but won’t abandon Russia entirelyIndia saved billions of dollars by stepping up imports of discounted Russian oil in the wake of the war in Ukraine, but punitive tariffs imposed by the US that came into effect Wednesday will quickly undo the gains, with no easy solutions in sight.Analysts estimate India has saved at least $17bn by increasing oil imports from Russia since early 2022. US President Donald Trump's decision to impose additional tariffs of up to 50% on Indian imports could slash exports by more than 40%, or nearly $37bn, this April-March fiscal year alone, according to New Delhi think-tank Global Trade Research Initiative (GTRI).The fallout from the tariffs will be lingering, and could be politically debilitating for Prime Minister Narendra Modi, with thousands of jobs at risk in labour-intensive sectors such as textiles, gems, and jewellery. India's response in the coming weeks could reshape its decades-old partnership with Russia and recalibrate its increasingly complex ties with the US, a relationship Washington sees as vital to countering China’s growing influence in the Indo-Pacific, analysts said."India needs Russia for defence equipment for several more years, cheap oil when available, geopolitical support in the continental space and political backing on sensitive matters," said Happymon Jacob, the founder of Delhi's Council for Strategic and Defence Research. "That makes Russia an invaluable partner for India."But he added: "Despite the difficulties between Delhi and Washington under Trump, the United States continues to be India’s most important strategic partner. India simply doesn’t have the luxury of choosing one over the other, at least not yet."Two Indian government sources said New Delhi wants to repair ties with Washington and is open to increasing purchases of US energy but is reluctant to fully halt Russian oil imports. Discussions with the US are ongoing, India’s foreign secretary told reporters on Tuesday, with officials from both countries holding virtual talks on trade, energy security including nuclear cooperation, and critical minerals exploration.Russian crude now accounts for nearly 40% of India’s total oil purchases from nearly nothing before the war, and analysts say any immediate stoppage would not only signal capitulation under pressure but also be economically unfeasible. Indian purchases are led by billionaire Mukesh Ambani's Reliance Industries , which operates the world's largest refining complex in Modi's home state of Gujarat.Global crude prices could more than triple to around $200 a barrel if India, the world’s third-largest oil consumer and importer, stops buying oil from Russia, according to internal Indian government estimates reviewed by Reuters. It would also lose the up to 7% discount Russian oil offers compared to global benchmarks. In an unusually sharp statement this month, India accused the US of double standards in singling it out for Russian oil imports while itself continuing to buy Russian uranium hexafluoride, palladium and fertiliser. New Delhi says other countries that have stepped up purchases of Russian oil, like China, have not been penalised. US Treasury Secretary Scott Bessent has accused India of profiteering from its sharply increased purchases of Russian oil and called it unacceptable. He told CNBC in an interview last week that unlike India's surge in Russian oil imports after the start of the war in Ukraine, China's purchases had increased to 16% from 13%. India's foreign ministry has said its crude imports from Russia are "meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by the global market situation".New Delhi warns that halting Russian oil imports, which is currently around 2mn barrels per day, would disrupt its entire supply chain and send domestic fuel prices soaring. It has said the previous US administration under Joe Biden had backed its purchases of Russian oil to keep global prices stable. Russia has said it expects India to keep buying oil from it.Modi has not directly commented on the tariffs but has repeatedly pledged support for India’s farmers — seen as a veiled response to Trump’s demands to open up India’s vast agricultural sector.Farmers are a key voting bloc, and Modi faces a tough election in the rural state of Bihar later this year. He has also pledged major cuts in a goods and services tax by October to lift domestic demand.In a flurry of diplomatic activity aimed at multipolarity, senior Indian officials have travelled to Russia in recent days, while Modi is set to visit China this month for the first time in over seven years. India-China relations began thawing about a year ago, following a deadly border clash in 2020. Modi is expected to meet both Chinese President Xi Jinping and Russian President Vladimir Putin at a summit meeting starting on Sunday of the Shanghai Cooperation Organisation, a regional security bloc. But the sources said India is still very cautious in its relations with China and not yet considering a trilateral summit between the three leaders, as hoped by Russia.Other countries could take their cue from how India reacts to the US tariffs, experts said."The key takeaway for other countries is that if India — an emerging major economic and military power — is under immense pressure from the US, they might have even less capacity to withstand American pressure," said Jacob, the analyst."Additionally, some might interpret the current dynamics as indicating that China could potentially serve as a counterbalance, especially given Trump’s unpredictable and aggressive geopolitical moves." International relations experts say Trump's recent moves have plunged the US-India relationship back to possibly its worst phase since the US imposed sanctions on India for nuclear weapons tests in 1998. Besides trade, the row could affect other areas like work visas for Indian tech professionals and offshoring of services.And even if India is able to eventually get some of the tariffs reversed, several consequences will linger, especially in trade."Competitors like China, Vietnam, Mexico, Turkiye, and even Pakistan, Nepal, Guatemala, and Kenya stand to gain, potentially locking India out of key markets even after tariffs are rolled back," said GTRI founder Ajay Srivastava, a former Indian trade official.

Ukrainian drone strikes on Russia’s oil export pipelines and a doubling of US tariffs on goods imported from India appear to be hitting Moscow’s crude flows.Weekly crude shipments from Russian ports fell by 320,000 barrels a day in the week to August 24, tanker-tracking data compiled by Bloomberg show.Flows dropped to a four-week low of 2.72mn barrels a day, pushed down by reduced loadings at the Baltic port of Ust-Luga. The drop left four-week average crude shipments little changed, with seaborne cargoes averaging 3.06mn barrels a day.Ukraine has intensified attacks targeting Russia’s oil infrastructure, hitting a major pumping station on the nation’s export pipeline network and several refineries.The Unecha pump station, on the Druzhba pipeline system close to Russia’s border with Belarus, was targeted by Ukrainian drones twice in the past two weeks.The attacks have halted piped crude deliveries to Hungary and Slovakia and appear to have hampered shipments from the port of Ust-Luga on Russia’s Baltic coast. The Baltic Pipeline System 2, which carries Russian and Kazakh crude to the port, begins at Unecha.Storage tanks at the port mean that any halt in deliveries may not result in an immediate drop in shipments, but only two tankers loaded Russian crude at Ust-Luga last week, down from four during the previous seven days and six in the week to August 10, the tracking data and shipping reports show.Recent strikes on the Volgograd and Novoshakhtinsk refineries helped to push Russia’s crude processing down by about 700,000 barrels a day in the third week of August from the average during the last week of July. That ought to free up more crude for export, if processing is halted for long periods.Separately, President Donald Trump’s doubling of US import tariffs on goods from India to 50%, imposed because of New Delhi’s purchases of Russian oil, appears to hitting the flow of Moscow’s crude to the south Asian nation, though it’s unclear how long the trend will persist.Shipments heading to India have fallen by more than 500,000 barrels a day over the past two months and even if all the tankers with no confirmed destination end up discharging at Indian ports, flows would still be down by 300,000 barrels a day, or 17%, since late June.The tariff increase could yet be reversed or paused, but refiners are planning to trim purchases of Russian crude in the coming weeks, a modest concession to Washington’s pressure, but also a signal that New Delhi doesn’t plan to cut ties with Moscow. Nevertheless, Russia sees the discounts it offers Indian refiners as big enough to keep them buying its oil.The US president has repeatedly said he would increase sanctions against Moscow if it failed to agree a ceasefire in Ukraine, most recently on Friday, but the threats have so far come to nothing.Trump’s recent meeting with President Vladimir Putin in Alaska saw the Russian leader conceding little, but getting another stay of execution on threatened US secondary tariffs on China. Chinese refiners have stepped up purchases of discounted cargoes relinquished by India.A total of 25 tankers loaded 19.07mn barrels of Russian crude in the week to August 24, vessel-tracking data and port-agent reports show. The volume was down from 21.3mn barrels on 28 ships the previous week.Crude flows in the period to August 24 stood at about 3.06mn barrels a day on a four-week average basis, up by 20,000 barrels a day from the period to August 17.The four-week average smooths out big swings in weekly numbers, giving a clearer picture of underlying trends in crude flows. Using more volatile weekly figures, shipments fell by about 320,000 barrels to a four-week low of 2.72mn barrels a day. The drop in weekly flows was driven by fewer cargoes being loaded at Ust-Luga.The gross value of Moscow’s exports fell by about $110mn, or 9%, to $1.11bn in the week to August 24 from $1.22bn the previous week. The drop in flows was compounded by slightly lower average prices for Russia’s crudes.