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US President Donald Trump’s backing of a Russia sanctions bill could trigger tariffs of up to 500% on countries buying Russian oil, raising serious concerns for India’s economy, stock markets, currency stability, and global trade dynamics.
Trump Threatens India With New Tariffs Over Russia Oil Purchases
New Delhi: According to US Republican Senator Lindsey Graham, US President Donald Trump has approved a bipartisan bill imposing strict sanctions on Russia.
This bill allows for the imposition of hefty tariffs of up to 500% on countries that purchase cheap crude oil from Russia. The aim of this move is to put pressure on Russia and weaken its economy in the context of the Ukraine war.
50 to 500% Tariff Hike? Trump’s Russia Sanctions Bill Threatens To Shake Up India-US Trade Relations
According to the US Congress website, this bill provides for strict action against individuals and countries that, on behalf of the Russian government, refuse peace talks with Ukraine, violate agreements, or attempt to destabilize the Ukrainian government. If the President deems it necessary, measures such as visa restrictions, asset seizures, and tariff increases of up to 500% can be implemented.
Donald Trump has repeatedly accused India of buying oil from Russia. The US has already imposed tariffs of up to 50% on Indian products, and there are now threats of further increases. If these tariffs extend to the services sector, it could have a profoundly negative impact on India's economy and stock market.
According to experts, rising tariffs could further increase India's trade surplus with the US, putting pressure on the rupee. A weaker rupee could prompt foreign institutional investors (FIIs) to withdraw their investments. This would lead to increased selling pressure in the market, creating a vicious cycle—a weaker rupee, FII selling, and a market downturn.
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Some analysts believe that the situation is currently under control because many of India's exports are in sectors where the impact of tariffs is limited. Furthermore, India has benefited from trade diversification and free trade agreements (FTAs). However, if the tariffs extend to services, the situation could become serious. Oil Alternatives and Potential Relief
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Some experts believe that India is not obligated to buy oil from Russia. If cheaper oil is available from countries like Venezuela, it could be positive for India and also ease tariff tensions with the US.
Geopolitical tensions and economic uncertainty typically boost gold and silver prices. If the tariff war escalates and the rupee weakens, a new rally in gold and silver could be seen. Experts believe that the prospect of rising inflation in the long term will also support bullion prices.
