Russia hints at 5% additional rebate to India on oil amid US tariff row

Russia on Wednesday hinted at offering 5 per cent additional discount to India on oil purchase and expressed hope its “strategic partner” would continue the crude trade despite the US punitive measures.

Addressing the media here, Russian Chargé d’Affaires in India Roman Babushkin said Moscow had a “special mechanism” to counter the US tariffs. “We hope India will not stop buying our oil. We have a true strategic partnership and are committed to tackle all challenges. There is a possibility of 5 per cent swing in rates, which is subject to negotiations,” he said.

Russia’s Deputy Trade Representative Evgeniy Griva, who accompanied Babushkin, said “despite the changing political situation, the crude oil exports to India would remain the same”. Asked how Russia would deal with the tariffs, Griva said “there were special mechanisms”.

Babushkin questioned the US tariffs against India, saying, “Friends don’t behave like this… The policy shows double standards... lack of trust, blackmail, undue pressure and disrespect for national interests.” He said it wasn’t the first time the India-Russia relationship was threatened by external factors. “Each time, we have worked out ways and we are certain to find a way out this time too," he said.

The Russian response came two days after White House Trade Adviser Peter Navarro claimed that India’s purchase of crude oil was “funding Moscow’s war in Ukraine and it needed to stop”. “India acts as a global clearing house for the Russian oil, converting embargoed crude into high-value exports while giving Moscow the dollars it needs,” Navarro wrote in an opinion piece published in the Financial Times.

India has so far not shown any inclination to stop the Russian oil trade. New Delhi is rather looking to get an even lower rate for the crude. The Russian crude price has been capped at $60 a barrel since December 2022. Last month, the European Union lowered the price cap from the existing $60.

India is the second-largest purchaser of Russian crude, which accounts for nearly 42 per cent of the country’s total oil imports.

Earlier, Babushkin termed the US threats and sanctions as a "reflection of unlawful competition". “They have just weaponised the economy,” he said. The Russian diplomat also added a warning for crude oil buyers globally, saying the prices could spike if the Russia-India trade was disrupted.

“We have so far managed to address the trade issue with India. The call President Vladimir Putin made to Prime Minister Narendra Modi means India matters very much. We have comprehensive agenda, which covers trade, energy, nuclear power, investment, etc.”