Customs law: US pressure, India in turmoil

Ending the purchase of Russian oil or being awarded high customs duties, such is the ultimatum launched by Washington in New Dehli. This could have major political and economic consequences both at national and abroad.

Narendra Modi, the Prime Minister, who directs the most populous nation in the world and the fifth world economy is due to face difficult decisions.

US President Donald Trump has given his longtime ally, one of the largest crude oil importers in the world, three weeks to find alternative suppliers.

For Mr. Trump, the deadline of August 27 is an attempt to deprive Moscow of significant income for his offensive in Ukraine. Samples of 25% already in place will double at 50% if India does not conclude an agreement.

“It is a geopolitical ambush with a 21 -day wick,” wrote Syed Akbaruddin, a former Indian diplomat with the United Nations, in the newspaper “Times of India”.

New Dehli described Washington’s decision as “unfair, unjustified and unreasonable”, while Mr. Modi seemed to be defying. Without mentioning the American president directly, he said Thursday that “India will never compromise” on the interests of his farmers.

Agriculture employs a large number of people in India and has been a key point of friction in commercial negotiations.

All of this seems far from the country’s first hopes for special pricing treatment after Trump said in February that he had created a “special bond” with Mr. Modi.

“The resilience of relations between the United States and India … is now put to the test more than ever in the past 20 years,” said Michael Kugelman, of the Asia-Pacific Foundation of Canada.

Russia represented almost 36% of the total oil imports of India in 2024, which bought approximately 1.8 million barrels of Russian crude oil at a reduced price per day.

Buying Russian oil has allowed India to save billions of dollars on import costs, now relatively stable domestic fuel prices.

Changing supplier will likely lead to price increases, but not to do so will affect India exports.

The Federation of Indian exporting organizations warned that the cost of additional American customs duties could make many “non -viable” companies.

Urjit Patel, a former governor of the Central Bank, said that Mr. Trump’s threats were the “worst fears” of India.

The Indian President sought to strengthen his ties with other allies.

For example, he called Brazilian President Luiz Lula Da Silva on Thursday, and the two men agreed to defend multilateralism “.

India National Security Advisor Ajit Doval met Vladimir Putin in Moscow, declaring that the dates of a visit to the Russian president were “almost finalized”.

According to Indian media, Mr. Modi could also go to China at the end of August. It would be his first visit since 2018, although this was not officially confirmed.

Neighboring India and China have long been competing for a strategic influence through South Asia.

Successive American administrations have long considered India as a key partner with similar interests concerning China.

“All these investments, all this meticulous work accomplished by many American presidents and Indian Prime Ministers, are in danger,” AFP Ashok Malik told AFP, the business consulting firm The Asia Group,

“To be honest, I have not seen the relationship also troubled since the early 1990s. I am not saying that everything is over, but it is in danger”.

Mr. Modi risks a potential return of national stick if it is perceived as folding in Washington.

“India must remain firm and put its national interests first,” wrote the newspaper “Indian Express” in an editorial.

Opposition politicians are actively monitoring.

Mallikarjun Kharge, president of the Congress, the main opposition party, warned that the government was “dangerously hesitant”. He also underlined the longtime policy of India “non-alignment”.

“Any nation that arbitrarily punishes India for our proven policy of strategic autonomy … does not understand the solid reinforcement of India,” Kharge said in a statement.

However, Syed Akbaruddin, a retired diplomat said that there was still hope.

New Delhi can be “intelligently flexible,” said Akbaruddin, suggesting that this could mean “buying more American oil if its price is competitive or engaging Russia on the cease-fire issue”.