Trump cutting India’s nose to spite Russia’s face

Looks like the moody Mr Trump has developed a special antipathy for India, more than almost any other country on his radar at the moment. As is well-known, India faces the highest tariffs (50 per cent) on exports to the US, which includes a punitive component of 25 per cent on account of India’s crude imports from Russia.

On 19 August, US treasury secretary (or finance minister) Scott Bessent pointed out to CNBC that India’s intake of Russian crude had risen from 1 per cent before the Ukraine conflict to 42 per cent of its total purchases. In percentage terms, he argued, China, which had been buying Russian oil even before the Ukraine crisis, had increased its consumption from 13 per cent to 16 per cent during the same period.

“India is just profiteering; they are reselling,” he said. “What I would call Indian arbitrage — buying cheap Russian oil [and] reselling it as product has just sprung up during the war, which is unacceptable.”

It has, of course, not gone unnoticed that Modi’s close friends Mukesh Ambani and Gautam Adani have made killings from re-exports and port services, respectively.

Briefing the media at the White House later the same day, Trump’s press secretary Karoline Leavitt said: “The president has put tremendous public pressure to bring this war to a close. He’s taken actions, as you’ve seen, sanctions on India and other actions as well.”

But, while Trump is supposedly pressuring Russia to make a peace deal with Ukraine, he is imposing sanctions on India! Takes two to tango, even in trade, doesn’t it?

Modi’s courtship of his “good friend” Trump is well remembered. One standout memory is the ‘ab ki baar, Trump sarkar’ campaign at the ‘Howdy Modi!’ event in Houston, Texas, in September 2019. Another is the grand reception accorded to Trump at a cricket stadium in Ahmedabad, with a hundred thousand in attendance.

Sadly for Modi, Trump is behaving like all this never happened. Maybe Modi’s avoidance of a meeting with him last September, when Trump was eyeing a second term, was the transgression that has stuck in his mind.

Trump is a difficult customer for most governments. He has turned US foreign policy upside down, spurning old allies while making overtures to Russia and China, his country’s post-WWII adversaries. The unreliability of US security commitments under Trump have, unthinkably, compelled Japan and South Korea to reconsider their nuclear non-proliferation policies.

India, a ‘strategic partner’ until recently, is being treated with contempt — and there are question marks over the future of Quad, the four-way alliance with Japan, India and Australia, envisaged to contain an expansionist China.

Meanwhile, as reported by Reuters, government-owned Indian Oil and Bharat Petroleum have placed orders for Russian crude in September and October. Indian refiners halted purchases in July due to narrower discounts and threats from Washington, but Indian Oil was quoted as saying that it would continue to buy Russian oil if it made economic sense.

Modi must hope the US tornado will die down once the US and Russia reach an agreement on Ukraine. Which is why India’s ministry of external affairs so enthusiastically endorsed the recent meeting between Trump and Putin in Alaska, even as counterparts in many parts of the world were more cautious.

There is no guarantee, though, that Trump will immediately waive the additional 25 per cent penalty on India if/when Russia and Ukraine stop being at war. If his animus towards India is also because of Modi’s refusal to publicly acknowledge his role in brokering the ceasefire between India and Pakistan this May, and his leniency contingent on India making the trade concessions it has apparently refused, then the bad times could persist. In any case, the basic 25 per cent tariff is debilitating enough for the Indian economy, the US being India’s biggest export market.

In desperation, Modi has turned to China. Even in the face of clear evidence of Chinese logistical and technological support for Pakistan during Operation Sindoor. Since 2020, the People’s Liberation Army of China is ensconced in an estimated 2,000 square miles of Indian territory in eastern Ladakh and has shown no signs of withdrawing. India has a $100 billion trade deficit with China, which Beijing has no apparent interest in addressing in a way that will make India happy.

Given this background, for Modi to say India–China ties have made steady progress since his meeting with Chinese President Xi Jinping in October is baffling, to say the least. Has China agreed to withdraw its troops from Ladakh? Has it pledged not to support Pakistan militarily in future? Has it promised to absorb greater exports from India?

Following Chinese foreign minister Wang Yi’s meetings with Modi and Indian external affairs minister S. Jaishankar in New Delhi, the two sides concurred on boosting business links. The only specific announcement, though, was that China will resume exporting rare earth minerals to India, which from India’s POV is a further expansion of the trade shortfall.

Incidentally, India’s own rare earth reserves put it among the world’s top five. Which could only mean that India has not been able to develop this capacity. Whatever happened to ‘Make in India’?

A Kashmir-type formula for Ukraine?

A resolution of the Ukraine situation, dependent on a pact between Trump, Putin and Europe, not to forget Ukraine, was still up in the air. Trump persisted with his characteristic blow hot, blow cold remarks on the subject. Meanwhile, the NATO military chiefs met online to chalk out a plan for a security shield for Ukraine to deter future Russian aggression.

Ukraine President Volodymyr Zelenskyy is under a lot of pressure to cede Crimea, which lies in southern Ukraine on the Black Sea and was captured by Russia in 2014. On the contested areas in eastern Ukraine, which have incrementally fallen into Russian hands since the invasion of February 2022, the Kremlin demands the same concessions from Kyiv as in the case of Crimea. The upshot of all this could be a PoK-type formula where land is occupied by Russia but looked upon as disputed by Ukraine.

Putin won’t easily agree to a meeting with Zelenskyy, with or without the US. Russian foreign minister Sergey Lavrov pointed out that any such meeting would have to be prepared for “gradually… starting at the ‘expert’ level and going through all the required steps”.

It will certainly be a big step if Putin consents to be in the same room as Zelenskyy. The new Russia, entertaining visions of Soviet superpower status, does not see Zelenskyy as an equal. Before joining the talks in Alaska, Lavrov sported a white vest emblazoned with the letters CCCP, the Russian acronym for the USSR (Union of Soviet Socialist Republics). Moscow’s goal is to reclaim Ukraine as Russian territory.

Ashis Ray can be found on X @ashiscray. More of his writing can be found here