Despite ongoing trade tensions and pressure related to oil imports, the White House has affirmed that President Donald Trump maintains frequent communication with Prime Minister Narendra Modi, signaling the importance Washington places on the U.S.-India relationship. White House Press Secretary Karoline Leavitt stated on Tuesday that Trump has great respect for Modi, highlighting that trade teams from both countries are engaged in "very serious discussions".
These discussions occur against a backdrop of strained relations due to tariffs and India's oil imports from Russia. In August, the U.S. imposed tariffs on Indian goods, effectively raising some duties to 50%, a move criticized by India as "unfair, unjustified, and unreasonable". The U.S. cited India's continued purchase of Russian oil as the reason for the increased tariffs. Washington's stance is that these imports are helping to fund Russia's war in Ukraine.
In response, the Ministry of External Affairs (MEA) in India has asserted that the country's energy sourcing decisions are guided by national interests and consumer welfare. MEA spokesperson Randhir Jaiswal emphasized India's commitment to securing affordable energy in a volatile global market through diversified sourcing.
Recent data indicates a shift in India's oil import strategy. While Russia remains the top supplier, there has been a notable increase in crude oil imports from the United States. In October, the U.S. exported 568,000 barrels per day to India, marking the highest level since March 2021. This accounts for 12% of India's overall oil imports. Conversely, reports suggest a potential decline in Russian oil exports to India following U.S. sanctions on major Russian producers like Rosneft and Lukoil. Some Indian refiners have already halted new bookings and are exploring alternative supply options.
Despite the trade friction, the U.S. and India have recently renewed a 10-year defense cooperation agreement, signaling a continued commitment to strategic ties. This pact aims to provide stability to the bilateral relationship amidst the trade disputes. Both Indian and U.S. officials have emphasized the importance of a free and open Indo-Pacific region, implicitly referencing the need to address China's growing influence.
President Trump has also claimed that he intervened to prevent an escalation of tensions between India and Pakistan, using the threat of tariffs as leverage. He suggested that a trade deal with India is contingent on maintaining peace in the region. However, India has maintained that differences with Pakistan are to be sorted out bilaterally without any third-party intervention.
Despite the complexities and challenges, the frequent communication between President Trump and Prime Minister Modi, along with ongoing trade discussions, indicates a desire to navigate these issues and strengthen the overall U.S.-India partnership. The coming months will be crucial in determining whether both nations can reach a mutually beneficial trade agreement while addressing concerns related to energy security and regional stability.
