Think India is safe from US tariffs? Not anymore! Trump's latest tariff move could hit India hard—costing billions!
How? Let me explain.
US President Donald Trump has signed an order slapping steep tariffs on buyers of Venezuelan oil and gas. And this could take effect as early as toady.
Why is Trump doing this?
The White House is blaming Venezuela for fueling migration to the US. Plus, Trump has been a long-time critic of Venezuela's government led by its leftist President Nicolás Maduro.
According to the White House, this move is all about cutting off revenue to Maduro’s regime, which the US has also accused of corruption and human rights violations.
But there’s more to it. This move also ramps up pressure on countries like India and China—who have kept buying Venezuelan oil despite past US sanctions. And with India being one of the biggest buyers, this tariff could have some serious consequences for us. In fact, we were the largest buyer of Venezuelan oil in December 2023 and January 2024 period.
Just to give you an idea:
-In December 2023, we imported 191,600 barrels per day.
-By January 2024, that number shot up to over 254,000 barrels per day—that’s almost half of Venezuela’s total exports!For 2024, India’s
Venezuelan crude imports totalled 22 million barrels, representing around 1.5 per cent of the country’s overall crude oil purchases. Now, here’s the problem: With the 25% Trump tariff, Venezuelan oil suddenly becomes a lot more expensive. That leaves India with two choices—pay the extra cost or cut imports and look for alternatives.
Either way, this decision won’t come cheap. If India reduces purchases, it may have to buy from more expensive markets, affecting energy costs.
Also, it’s not just about oil imports—big companies could take a hit too. Take Reliance Industries, for example. They restarted Venezuelan oil imports in 2023 after getting a US sanctions waiver. But now? This tariff could disrupt their supply chain and raise costs. Other Indian refiners—especially those looking for cheaper crude—might also feel the heat.
And let’s not forget the bigger picture:
-Higher crude costs could lead to higher fuel prices here in India.
-Industries that rely on low-cost energy—like transport, aviation, and manufacturing—could see their expenses shoot up.
Bottom line? This tariff isn’t just about oil—it could have a ripple effect across the Indian economy. With the deadline just days away, all eyes are on how India will respond—whether through diplomacy, alternative supply chains, or a strategic workaround.
