India Should Halt Imports From Sanctioned Russian Oil Firms, Seek Tariff Rollback Before US Trade Talks: GTRI

New Delhi, Nov 1 (KNN) India should suspend oil imports from sanctioned Russian firms, seek the removal of punitive tariffs, and resume trade talks with the United States only after ensuring fair terms, according to the Global Trade Research Initiative (GTRI).

The think tank outlined a three-step approach for India as it navigates ongoing negotiations on a bilateral trade agreement with the US.

In its policy note, GTRI recommended that India initially stop sourcing crude oil from sanctioned Russian companies like Rosneft and Lukoil, warning that continued purchases could expose the country to secondary sanctions and potentially impact its digital and financial systems, reported ANI.

The warning comes after the US imposed sanctions on the two firms on October 22. These companies account for more than half of Russia’s crude output, making India’s continued sourcing from them vulnerable to broader compliance risks, the group stated.

Once such imports are halted, India should push for withdrawal of the 25 percent ‘Russian oil’ tariff applied by the US on Indian exports, GTRI argued. 

Introduced on July 31, the duty—combined with existing tariffs—has effectively doubled levies on Indian goods to 50 percent, contributing to a 37 percent decline in exports between May and September, according to the note. The tariff applies even to imports from non-sanctioned Russian producers, making it a sweeping penalty, it added.

Only after the duty burden returns to normal levels should India resume bilateral trade talks, and then only on ‘fair and balanced’ terms, the think tank said. 

GTRI cautioned that beyond tariff-related losses, secondary sanctions could severely disrupt operations by restricting access to the SWIFT network, freezing dollar-based transactions, and curbing digital services essential for refineries, ports and financial institutions. 

While tariffs hurt exports, sanctions pose systemic risks that could paralyse key economic functions, it said.

The organisation also recommended that India push for tariff treatment comparable to that extended to major partners like the European Union, including lower average industrial duties and duty-free access for priority export sectors such as textiles, gems and jewellery, and pharmaceuticals.

(KNN Bureau)