India tries to balance US, Russia ties in pursuit of Trump deal
Trump said on Wednesday that Prime Minister Narendra Modi had indicated that India would stop buying oil from Russia, a key request of the US president. Contrary to earlier denials, New Delhi’s response on Thursday was tepid. Without mentioning Trump or Russia, India has signaled it will buy more US oil while continuing to ensure affordable supplies for consumers.
The latest developments illustrate Modi’s difficult balancing act between the United States, India’s largest export market, and Russia, a long-time military and strategic partner. India imports about a third of its oil from Russia, and New Delhi has argued that a complete halt to purchases would not be possible without access to other cheaper sources.
“India needs a trade deal with the US and it needs energy access at affordable prices,” said Ashok Malik, a partner at Asia Group. “Economic statecraft needs Indian diplomacy to achieve both. And that is what India is trying to do.”
Indian refiners expect to reduce energy purchases from Russia and buy more liquefied petroleum gas, indicating their willingness to work with Washington. A senior trade official in New Delhi also said this week that India could increase oil imports from the United States by up to $15 billion.
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Trump had been publicly berating India for months for buying Russian oil; he said it helped finance President Vladimir Putin’s war in Ukraine, thus undermining Western efforts to resolve the conflict.
The US leader took a more conciliatory approach this week, saying Modi had assured him that India would halt purchases of Russian oil but could not do so immediately. He said India could continue purchasing after the war is over.
Modi and Trump have spoken at least twice in recent weeks, and the two leaders discussed progress in trade talks during a meeting last week. A team from New Delhi is currently in the United States to discuss the trade deal and hopes to reach an agreement as early as next month, Bloomberg News reported earlier this week.
“The narrative has witnessed a sharp turn from two months ago to the point where talks appeared to have collapsed,” said Shumita Deveshwar, chief economist at GlobalData.TS Lombard. “There is certainly hope now that some kind of deal will be made.”
India became a major importer of Russian crude oil after the start of the war in Ukraine in 2022 and was able to receive deliveries at a discount. Oil purchases from Russia fell slightly last month but still accounted for a third of India’s total imports despite US pressure to restrict flows.
“I do not expect a significant decline in India’s imports from Russia in the short term,” said Vandana Hari, founder of Singapore-based market analysis firm Vanda Insights.
Trump’s announcement that he will have another meeting with Putin is also watched with excitement by the Indian government. Any potential thaw between the two major powers would give Modi greater flexibility to pursue defense and energy partnerships with Moscow while deepening trade and strategic cooperation with Washington.
“Everyone talks to everyone else, and that’s the purpose of diplomacy,” said Asia Group’s Malik. “And frankly, we’re in a very volatile world where everyone is fending for themselves.”
