Now Reading: India insulated from US tariff threat on Russian crude
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India insulated from US tariff threat on Russian crude
The US Senate passed a bill on Friday that could impose up to 100% tariffs on nations buying Russian crude, including India. But Kotak Securities' Anindya Banerjee said India's economy is well-insulated.…
The Story in Brief
The US Senate passed a bill on Friday that could impose up to 100% tariffs on nations buying Russian crude, including India. But Kotak Securities' Anindya Banerjee said India's economy is well-insulated. The discount on Russian crude is now only $2-3 billion a year, against India's $150 billion annual oil import bill. Switching to other suppliers would not hurt inflation or fiscal deficits. India has also built non-dollar payment channels, including rupee trade through Vostro accounts and bilateral settlements using UAE dirhams. The bigger risk is a global price spike above $100 per barrel, which would add $15 billion to the import bill for every $10 jump.
The Indian Opinion
Claims that US tariffs on Russian crude will cripple India's economy ignore the math. The $2-3 billion annual discount is a fraction of the $150 billion import bill. India's real vulnerability is a global oil price surge, not a supplier switch. The exaggerated narrative of dollar weaponisation is real, but de-dollarisation will take years. The test to watch: whether the US House passes the bill and whether the discount on Russian crude vanishes entirely. That alone will separate hype from reality.
Source: economictimes.indiatimes.com
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