India in wait-&-watch mode over secondary tariffs on Russian oil

India is in ‘wait and watch’ mode over the fallout of proposed ‘secondary sanctions’ on Russia. New Delhi’s exports of refined petroleum products derived from Russian crude oil, will face additional tariffs due to secondary sanctions.

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US President Trump on Tuesday mentioned potential new sanctions on Russian oil that would kick in within 50 days if Russian President Vladimir Putin does not agree to peace deal to end the conflict with Ukraine. NATO Secretary General Mark Rutte echoed Trump, and warned Brazil, China and India saying these countries could be hit ‘very hard’ by secondary sanctions if they continued to do business with Russia.

India is a major importer of Russian crude oil which is capped at $60 to a barrel — much lower than prevailing international rates. Indian Crude imports from Russia are presently at 2.08 million barrels per day and meet some 42 per cent of Indian imports.

More than half of these imports from Russia are done by three refineries in India, which further export refined products to G7 countries. When additional tariffs kick in, exports of refined products from India would be out priced in the market.