New Delhi: Nobel Prize-winning economist Abhijit Banerjee has urged India to mirror on the price of cheaper Russian oil. He questioned whether or not paying excessive U.S. tariffs is definitely worth the financial savings. His feedback got here days after U.S. President Donald Trump introduced a 25% further tariff on Indian items. The motion targets India’s continued large-scale purchases of discounted Russian crude.
With the imposition of recent tariff, Indian merchandise coming into the U.S. market will now face a complete responsibility of fifty%. This marks one of many highest charges imposed by Trump on any nation. The extra tariff takes impact on August 27. The long-discussed India-US commerce deal stays stalled. Washington seeks larger entry to India’s farm and dairy sectors, whereas New Delhi has held again on concessions.
The impression could possibly be extreme. About $27 billion value of Indian exports with out particular commerce exemptions could lose competitiveness in the USA.
Chatting with information company PTI on the sidelines of an occasion at BML Munjal College, Banerjee stated the federal government ought to weigh choices fastidiously. He urged exploring whether or not the USA would take away tariffs if India halted Russian oil imports.
India stays the biggest world purchaser of Russian crude. In July, refiners bought 1.6 million barrels per day. For August and September, no new orders have been positioned. Black Sea oil now gives a reduction of solely about $2 per barrel. In 2024-25, India imported 88 million tonnes of Russian oil. This shaped a big share of the 245 million tonnes of complete crude imports. Oil contracts for August and September have been finalised earlier than Trump’s tariff announcement on August 7.
Banerjee emphasised that at a 25% tariff, some Indian exports had already misplaced their worth benefit. Elevating it to 50% could not change a lot for these merchandise.
He added that coverage circles are already discussing a lower in Russian crude purchases.
On the economic system, he described the present yr’s outlook as weaker than anticipated. He cited low non-public funding and stress on the center class. He pointed to hiring freezes in main companies such because the Tata Consultancy Service (TCS) and stagnant wages within the info expertise (IT) sector. These points, he stated, stay unresolved.
India’s seafood sector is already feeling the pressure. The Seafood Exporters Affiliation of India (SEAI) has urged the commerce and finance ministries for pressing reduction. It says practically $2 billion in shrimp exports face severe obstacles within the U.S. market attributable to Trump’s tariff.
The SEAI seeks a 30% improve in working capital by way of mushy loans, with curiosity subsidies and a 240-day moratorium on loans for pre- and post-packing operations.
SEAI Secretary-Basic Ok.N. Raghavan advised PTI the shrimp business is below heavy stress and desires speedy authorities intervention.