NEW DELHI: Nobel laureate Abhijit Banerjee has urged India to reassess its dependence on discounted Russian oil in light of the United States’ steep tariff hike on Indian goods.
“We need to think hard about whether Russian oil imports are worth it, and then go back to the US to say, will they take the tariff off if we stop importing Russian oil,” Banerjee told PTI on the sidelines of an event at BML Munjal University.
His remarks come after US President Donald Trump signed an executive order imposing an additional 25 per cent duty on Indian exports in retaliation for New Delhi’s continued Russian oil purchases.
Effective August 27, the move doubles total US tariffs on India to 50 per cent – one of the highest rates levied by Washington on any country.
India has seen price discounts on Russian oil narrow to just $2 per barrel
The escalation could hit about $27 billion worth of non-exempt Indian exports to the US. India, currently the largest buyer of Russian crude at 1.6 million barrels per day in July, has seen price discounts narrow to just $2 per barrel. Refiners have placed no fresh orders for August and September.
In FY25, India imported 88 million tonnes of Russian oil out of a total 245 million tonnes. Orders for the next two months were secured before Trump’s announcement on August 7.
Banerjee also floated the idea of revisiting curbs on Chinese investment as part of broader trade talks, noting Beijing’s own need to maintain stable ties with Washington.
On the domestic economy, he struck a cautious note, pointing to a squeezed middle class, stagnant IT sector wages, and sluggish private investment. “Not as good as we expected,” he said. “These are all issues we have not dealt with, and we are sitting on them.”
