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Straits Times
11-08-2025
- Business
- Straits Times
The tycoons who profit from India's thirst for Russian oil
Sign up now: Get ST's newsletters delivered to your inbox About 30 per cent of the crude that Reliance Industries buys comes from Russia. NEW DELHI – The last time many Americans paid any attention to Jamnagar, a sunbaked industrial stretch on the mud flats on India's Gulf of Kutch, it was thanks to Rihanna. She performed there in March 2024 for an exclusive audience – Mr Bill Gates, Mr Mark Zuckerberg, Ms Ivanka Trump and the like – at the prewedding party for Mr Anant Ambani, the younger son of Asia's richest man, Mr Mukesh Ambani. They were in Jamnagar, which had no international airport or hotel rooms for most of the guests, because its port and oil refineries have become central to the Ambanis' empire and US$115 billion (S$147.8 billion) fortune. Last week, Jamnagar was the backdrop for a grittier story: Its oil – some of which is imported from Russia – has become a sticking point in US-Indian relations. Months of back-and-forth over trade between Washington and New Delhi unraveled in July, along with much of the friendly feeling between the world's two biggest democracies. On July 30, President Donald Trump slapped India with a 25 per cent tariff . He tossed in an insult, posting on social media that American companies would soon start drilling with India's nemesis, Pakistan. 'Who knows,' he wrote, 'maybe they'll be selling Oil to India some day!' Top stories Swipe. Select. Stay informed. Business Keppel to sell M1 unit's telco business to Simba for $1.43 billion Business Nvidia, AMD agree to pay 15% of China chip sale revenues to US: Sources Singapore Healthy lifestyle changes could save Singapore $650 million in healthcare costs by 2050: Study Singapore BTO income ceiling, age floor for singles being reviewed: Chee Hong Tat World Netanyahu says Israel's new Gaza offensive will start soon Opinion Anwar's government: Full house but plenty of empty offices Singapore Man's claim amid divorce that his mother is true owner of 3 properties cuts no ice with judge Business Singapore can deliver and thrive in a fragmented global economy: Morgan Stanley analysts One week later, Mr Trump signed an executive order that doubled the punishment. In effect, he pushed India's exporters into peril on the grounds that their government was aiding Russia's war aims in Ukraine by letting Indian companies profit from the international oil trade. Mr Trump did not name the companies. But all roads lead back to Mr Mukesh Ambani and his company, Reliance Industries. Its principal refinery in Jamnagar – part of Gujarat, the home state of India's prime minister Narendra Modi – is the biggest in the world. Many of Reliance's investments there and across India have been planned in consultation with Mr Modi and other politicians. This area, including another refining business nearby, brings in 1.5 million barrels of oil every day, about a third of it shipped from Russia. The Reliance name is everywhere in India. The company, started by Mr Mukesh Ambani's father in Bombay (now Mumbai) in 1965 as a trading house for polyester, is the nation's biggest conglomerate, composed of dominant players in energy, data and mobile networks, retail, finance and more. The companies stream HBO, they own one of the world's most valuable cricket teams, they run a legion of charitable foundations, and recently they bought up nearly every haute couture brand in the country. The Reliance refinery at Jamnagar is internationally rated in the top percentile in terms of complexity. There are many kinds of crude oil, and the Jamnagar facility can easily switch from refining crude from the Persian Gulf, Latin America or wherever the best prices can be found. Jamnagar had processed 500 types over the past 25 years, a Reliance spokesperson said. While about 30 per cent of the crude that Reliance buys comes from Russia, a company spokesperson said that 'it is incorrect to attribute profitability only to Russian crude oil discounts'. He added that the company had been consistently profitable over decades, more so than any regional competitor, before and after the wartime discounts. The money it makes selling refined products to Europe is a small fraction of its total output. The other big refining business in Jamnagar is Nayara Energy, just a few miles away from Reliance's. The Nayara refinery is massive and modern, too, though its output is only a third of Reliance's. Since 2017, Nayara has been 49 per cent owned by Rosneft, Russia's state oil company. One of its other largest stakeholders is a Russian-owned investment firm. That means that a Rosneft-backed entity has been buying oil from Russia, processing it in India and in some cases selling the results back to Europe. Unlike Reliance, it has most of its eggs in one basket. In the first year of the war in Ukraine, these private refiners became the world's biggest buyers of seaborne Russian crude. Shut out of the European market, Russia offered discounts to whoever would take its stranded crude. India, along with China and Turkey, stepped in. For two or three years, Indians and Americans took it in stride. Mr Eric Garcetti, President Joe Biden's ambassador in New Delhi, said at a conference in Washington in May 2024 that 'we wanted somebody to be buying Russian oil', to stabilise the price. Mr Trump's salvo seemed to come out of the blue. Mr Pankaj Saran, a former Indian ambassador to Russia who runs the NatStrat think tank in New Delhi, said archly: 'The trigger for the penalty would seem to be an action which has been going on in plain view since 2022.' To him, Mr Trump's recent talk about Russian oil looks like a red herring. India, home to 1.4 billion people and the world's fastest-growing large economy, has only modest oil reserves and needs to import 85 per cent of its supply. Traditionally that meant spending hard currency in the Persian Gulf. The pressure those purchases put on India's balance of trade forces the government to take a strong interest in how its thirst for oil can be met. 'We are completely defenseless against energy costs, because we don't have oil,' Mr Saran said. For that reason, 'the government has actively encouraged the refining sector'. Reliance's balance sheet is such that it does not need the Russian oil trade, and Nayara Energy might not, either. It did not respond to requests for comment. There are indications that all of India's importers of crude were already scaling back their purchases, as European countries prepared to toughen up their constraints.
Kuwait Times
07-08-2025
- Business
- Kuwait Times
Trump order imposes additional 25% tariff on goods from India
RBI holds key rates • US envoy Witkoff is in Moscow WASHINGTON: US President Donald Trump issued an executive order on Wednesday imposing an additional 25 percent tariff on goods from India, saying the country directly or indirectly imported Russian oil, adding to 25 percent tariffs already announced. The move threatens to further complicate US-Indian relations and comes shortly after a Indian government source said Indian Prime Minister Narendra Modi would visit China for the first time in over seven years later this month. US-India ties are facing their most serious crisis in years after talks with India failed to produce a trade agreement. The White House move, first signaled by Trump on Monday, follows meetings by Trump's top diplomatic envoy Steve Witkoff in Moscow aimed at pushing Russia to agree to peace in Ukraine. Trump has threatened higher tariffs on Russia and secondary sanctions on its allies, if Russian President Vladimir Putin does not move to end the war in Ukraine. The additional tariffs mean India will face the highest levy along with Brazil, putting it at a significant disadvantage against regional competitors such as Vietnam and Bangladesh. The additional tariffs will come into effect after 21 days but it will be on top of earlier 25 percent so the total 50 percent rate will be a big negative for Indian exports. However some key segments like electronics and pharma continue to be exempt from this additional rate. At 50 percent rate, many Indian exports will face a handicap versus countries that are in the 15-30 percent bucket. While Trump's order gives another 21 days for a deal to breakthrough, in case it does not India will have to significantly lower FY26 GDP growth forecast to below 6 percent, baking in a 40-50 bps hit. This would be double our earlier estimates (of GDP hit from higher tariffs). The pressure is mounting on India to come to a trade agreement. India may agree to significantly reduce Russian purchases over a phased manner and diversify to other sources. India expects to lose a competitive advantage in about $64 billion worth of goods exported to the US due to President Donald Trump's 25 percent tariff and 25 percent penalty for buying Russian oil. India faces its most serious diplomatic crisis with the United States in years after Trump imposed the highest tariffs among Asian peers on goods imported from India, even before any penalty. A relatively low share of exports in India's $4 trillion economy is seen limiting the direct impact on growth to 40 basis points. The Reserve Bank of India left its GDP growth forecast for the current April-March financial year unchanged at 6.5 percent and held rates steady on Wednesday despite the uncertainty created by tariff hikes. The trade impact estimates were prepared by the Indian government after Trump announced the unexpectedly high tariff for Indian goods, along with the unspecified penalty. The Indian government in its assessment report has assumed a 10 percent penalty for buying Russian oil, taking the tariff to 35 percent, the four Indian government sources told Reuters. They declined to be identified because they were not authorized to speak to media. India's trade ministry did not immediately respond to a request for comment. India's National Security Adviser Ajit Doval is in Russia on a scheduled visit and is expected to discuss India's purchases of Russian oil in the wake of Trump's pressure on India to stop buying Russian crude, according to a government source. His visit will be followed by Foreign Minister Subrahmanyam Jaishankar in the weeks to come, amid India's attempts to placate Washington's concerns while balancing historical ties with Moscow. India's central bank maintained its key interest rate at 5.50 percent on Wednesday, as US President Donald Trump ramped up threats to raise tariffs on New Delhi because of Russian oil purchases. The Reserve Bank of India (RBI) kept steady the repurchase rate, the level at which it lends to commercial banks, after a unanimous vote by a six-member panel. A majority of analysts had forecast a pause following a surprise 50-basis-point reduction in June. Bank governor Sanjay Malhotra said global trade challenges remained but that the 'Indian economy holds bright prospects in the changing world order'. 'We have taken decisive and forward looking measures to support growth,' he said in a statement. The RBI cut rates for the first time in nearly five years in February and followed up with two other reductions in April and June. The Indian government has forecast above-average monsoon rains, which observers say should help growth, as higher agricultural output will aid the rural economy and keep vegetable prices stable. But Trump's announcement Tuesday to 'substantially' hike tariffs on Indian imports because of New Delhi's purchases of Russian oil has added pressure on India. Before that threat was made, the existing 10 percent US tariff on Indian products was already due to rise to 25 percent on Thursday. Malhotra acknowledged that 'the uncertainties of tariffs are still evolving' even though 'growth is robust'. – Agencies
GMA Network
06-08-2025
- Business
- GMA Network
Trump order imposes additional 25% tariff on goods from India
US-India ties are facing their most serious crisis in years after talks with India failed to produce a trade agreement. REUTERS/ Dado Ruvic/ Illustration WASHINGTON — US President Donald Trump issued an executive order on Wednesday imposing an additional 25% tariff on goods from India, saying the country directly or indirectly imported Russian oil, adding to 25% tariffs already announced. The move threatens to further complicate US-Indian relations and comes shortly after a Indian government source said Indian Prime Minister Narendra Modi would visit China for the first time in over seven years later this month. US-India ties are facing their most serious crisis in years after talks with India failed to produce a trade agreement. The White House move, first signaled by Trump on Monday, follows meetings by Trump's top diplomatic envoy Steve Witkoff in Moscow aimed at pushing Russia to agree to peace in Ukraine. Trump has threatened higher tariffs on Russia and secondary sanctions on its allies, if Russian President Vladimir Putin does not move to end the war in Ukraine. — Reuters
Business Recorder
06-08-2025
- Business
- Business Recorder
Trump imposes additional 25% tariff on goods from India
US President Donald Trump issued an executive order on Wednesday imposing an additional 25% tariff on goods from India, saying the country directly or indirectly imported Russian oil, adding to 25% tariffs already announced. The development comes a day after Trump said he would increase the tariff charged on imports from India over the next 24 hours, given India's continued purchases of Russian oil. The tariff is set to take effect in three weeks and would be added on top of a separate 25% tariff entering into force on Thursday. It maintains exemptions for items targeted by separate sector-specific duties such as steel and aluminum, and categories that could be hit like pharmaceuticals. The move threatens to further complicate US-Indian relations and comes shortly after a Indian government source said Indian Prime Minister Narendra Modi would visit China for the first time in over seven years later this month. US-India ties are facing their most serious crisis in years after talks with India failed to produce a trade agreement. The White House move, first signaled by Trump on Monday, follows meetings by Trump's top diplomatic envoy Steve Witkoff in Moscow aimed at pushing Russia to agree to peace in Ukraine. Trump has threatened higher tariffs on Russia and secondary sanctions on its allies, if Russian President Vladimir Putin does not move to end the war in Ukraine.
Business Recorder
06-08-2025
- Business
- Business Recorder
Trump hikes tariff on India to 50% over ‘oil purchases from Russia'
US President Donald Trump issued an executive order on Wednesday imposing an additional 25% tariff on goods from India, saying the country directly or indirectly imported Russian oil, adding to 25% tariffs already announced. The development comes a day after Trump said he would increase the tariff charged on imports from India over the next 24 hours, given India's continued purchases of Russian oil. The tariff is set to take effect in three weeks and would be added on top of a separate 25% tariff entering into force on Thursday. It maintains exemptions for items targeted by separate sector-specific duties such as steel and aluminum, and categories that could be hit like pharmaceuticals. The move threatens to further complicate US-Indian relations and comes shortly after a Indian government source said Indian Prime Minister Narendra Modi would visit China for the first time in over seven years later this month. US-India ties are facing their most serious crisis in years after talks with India failed to produce a trade agreement. The White House move, first signaled by Trump on Monday, follows meetings by Trump's top diplomatic envoy Steve Witkoff in Moscow aimed at pushing Russia to agree to peace in Ukraine. Trump has threatened higher tariffs on Russia and secondary sanctions on its allies, if Russian President Vladimir Putin does not move to end the war in Ukraine.
