Reasons why India needs Russian oil despite Trump tariff orders
The world is witnessing a significant shift in global trade policies, with the United States imposing tariffs on various countries, including India. US President Donald Trump has imposed a 50% tariff on Indian goods, effective August 27, as a retaliatory measure against India’s alleged unfair trade practices. However, India is not caving in to this pressure, and instead, is exploring alternative options to meet its energy needs. One such option is Russian oil, which has emerged as a viable solution for India’s petrochemical exports, bilateral trade, and reduced dependence on imported oil.
Russian oil to fuel India’s petrochemical exports
India’s petrochemical industry is a significant contributor to the country’s economy, and the sector is heavily dependent on imported crude oil. Russia, with its vast reserves of crude oil, has emerged as a reliable partner for India’s petrochemical exports. The Indian government has been actively engaging with Russian oil companies to secure long-term contracts for crude oil supplies. This move is expected to boost India’s petrochemical exports, which are expected to reach $45 billion by 2025.
India’s petrochemical industry is largely dependent on naphtha, a petrochemical feedstock derived from crude oil. The Indian government has been promoting the use of naphtha-based petrochemicals to reduce the country’s dependence on imported feedstocks. Russian oil companies, such as Rosneft and Gazprom Neft, have been willing to supply naphtha to Indian petrochemical companies, which is expected to boost India’s petrochemical exports.
Strengthening bilateral trade
India and Russia have enjoyed strong bilateral ties in the energy sector, with Russia being one of India’s largest crude oil suppliers. The Indian government has been actively engaging with Russian oil companies to strengthen bilateral trade ties. In recent years, India has been increasing its imports of Russian crude oil, which has helped to reduce its dependence on Middle Eastern oil.
The Indian government has been promoting the use of Russian oil in its refineries, which has helped to improve the country’s energy security. Russian oil companies have been willing to supply crude oil to Indian refineries, which has helped to reduce the country’s dependence on imported crude oil. This move is expected to strengthen bilateral trade ties between India and Russia, which is expected to benefit both countries.
Lack of renewable energy capacities to reduce dependence on imported oil
India’s energy mix is heavily dependent on fossil fuels, with coal, oil, and gas accounting for over 90% of the country’s energy needs. The Indian government has been promoting the use of renewable energy sources, such as solar and wind power, to reduce the country’s dependence on imported oil. However, the country still lacks the necessary infrastructure to support a significant shift to renewable energy.
The Indian government has been promoting the use of electric vehicles, which is expected to reduce the country’s dependence on imported oil. However, the country still lacks the necessary infrastructure to support a significant shift to electric vehicles. Russian oil companies have been willing to supply crude oil to Indian refineries, which has helped to improve the country’s energy security.
Conclusion
The Indian government’s decision to ignore Trump’s tariff orders and opt for Russian oil is a strategic move to strengthen bilateral trade ties, fuel India’s petrochemical exports, and reduce dependence on imported oil. The country’s energy mix is heavily dependent on fossil fuels, and the lack of renewable energy capacities has forced the government to rely on imported oil. Russian oil companies have been willing to supply crude oil to Indian refineries, which has helped to improve the country’s energy security.
The Indian government’s decision to opt for Russian oil is expected to benefit both countries. India will be able to reduce its dependence on imported oil, while Russia will be able to strengthen its bilateral trade ties with India. The move is also expected to boost India’s petrochemical exports, which are expected to reach $45 billion by 2025.
Source:
https://www.logisticsoutlook.com/business/trump-tariff-india-russian-oil
