Bloomberg: Trade talks hit snag as US targets India’s Russian energy purchases

The US has attempted to bring India’s oil imports from Russia into discussions on a trade agreement, according to sources familiar with the matter quoted by Bloomberg, even as Indian refiners increase these purchases to satisfy growing domestic demand.

A US delegation led by Assistant Trade Representative Brendan Lynch raised the issue with Indian negotiators during a meeting on Tuesday, the sources said, requesting anonymity as the information is not public. Such a demand is unusual, as a country’s dealings with a third nation rarely become a subject in bilateral trade negotiations.

Earlier this week, a US team visited New Delhi for a day of discussions, as both sides worked to ease tensions following President Donald Trump’s imposition of a 50% tariff on India, among the highest in Asia. Signs of a potential thaw appeared after Trump called Prime Minister Narendra Modi on his birthday this week, generating cautious optimism in New Delhi regarding a possible trade deal.

During Tuesday’s discussions, India pushed for the removal of the additional 25% levy on its Russian energy imports, the sources said, indicating that a resolution may not come quickly. The Indian government has criticised the extra tariffs as “unfair, unjustified and unreasonable,” while defending its Russian oil purchases as essential for energy security.

Bloomberg reported on September 19 that Indian refiners have no intention of reducing Russian crude imports as domestic fuel demand rises following the monsoon, and the government has issued no directives to scale back.

Following the Tuesday talks, both countries described the discussions as “positive,” noting that various aspects of the trade agreement were covered, and agreed to “intensify” efforts to finalise a deal.

The US and India had previously pledged to conclude a bilateral trade agreement by this fall, but negotiations broke down as both sides hardened their positions, and Trump increased pressure on New Delhi over its relations with Moscow. Washington is also seeking greater access to India’s dairy and agricultural sectors, which India remains reluctant to open.

By Tamilla Hasanova