- 6 months ago
The India-US trade deal is turning into a political flashpoint. The interim agreement has triggered concerns among opposition parties, farmer groups and foreign policy experts after more details emerged over the weekend.
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00:00Let's raise those questions that it seems no one either wants to ask and certainly no one seems to answer.
00:07Is the US trying to arm twist India on oil purchases?
00:10Is India's strategic autonomy protected or will it be hit if the United States dictates terms on oil purchases?
00:18Will India actually halt oil imports from Russia or only diversify its basket further?
00:24Will there be friction with the Trump administration on this issue?
00:28Joining me now, our special guest, Ambassador Zalme Khalilzad is a 26th US representative to the UN, a former US ambassador.
00:38Casey Singh is former Indian ambassador and Dr. Brahma Chalani is strategic affairs expert.
00:43Thank you all very much for joining us.
00:46Before I come to you, I just want to play what Foreign Secretary Vikram Misri has said today on the contentious issue,
00:53maintaining that the foremost priority, he said, was to safeguard the interests of Indian consumers,
00:59but added oil refiners will decide where to import oil from depending on market conditions.
01:05Listen in to him and then we'll come to our guest.
01:09Our approach is to maintain multiple sources of supply and diversify them as appropriate to ensure stability.
01:19Stability.
01:21Therefore, I would say that the more diversified we are in this area, the more secure we are.
01:28Insofar as actual sourcing of energy is concerned, again, all of you follow this closely,
01:38so you know that the actual sourcing is done by oil companies.
01:42Oil companies in the public sector, oil companies in the private sector.
01:45And they make decisions based on market conditions.
01:51They assess availability at any given point in time.
01:56They assess risks.
01:58They assess costs in this process.
02:00And obviously, all of these companies also have their own internal accountability-related processes to look at
02:12and certain fiduciary responsibilities in the market.
02:17Okay, let me take that to you, Dr. Brahma Chalani, first.
02:20Dr. Chalani, you've come out and said you've already raised questions certainly on Twitter or X
02:26about this ambiguity over oil purchases.
02:29Now, the government is saying, look, we have multiple sources
02:32and it is for private oil refiners to decide based on market conditions.
02:36Can you really say that the U.S. is arm-twisting India?
02:40Let's be clear on one thing, Rajdeep.
02:44The issue is not about India's Russian oil purchases.
02:47It was never about India's Russian oil purchases.
02:51If it was about Russian energy imports, the U.S. would have gone after the largest and second-largest importers of Russian energy,
03:00which are China and the EU.
03:03But it has taken no action against either.
03:05In fact, Washington is currently negotiating a deal with Moscow that will extend to the energy sector
03:12after the Ukraine war is over.
03:14The issue is about forcing India to turn its back on Russian energy supplies
03:20so that India buys higher-priced U.S. energy.
03:24It is about tying India's energy security to a more expensive and geographically distant supply of the U.S.
03:33In a way, history is repeating itself.
03:36After Trump, in his first term, imposed a blanket ban on Iranian energy exports,
03:43India halted all its oil imports from Iran.
03:49Iran is geographically the closest supplier for India.
03:53And traditionally, Iran has offered its oil to India at a discount to the Brent benchmark.
04:01Because of the U.S. sanctions, the heavily discounted Iranian crude remains the world's cheapest,
04:07much cheaper than even Russian oil.
04:09But India's termination of oil imports from Iran made China the almost exclusive buyer of Iranian energy.
04:18But more importantly, India, after ending its energy relationship with Iran,
04:23began buying American oil and gas in a major way.
04:26If you skip the data from 2019 onwards, how India's imports from the U.S. rose sharply.
04:31Now, by squeezing India on Russian oil purchases, Trump is hoping that India will succumb to U.S. pressure once again
04:42and become a top energy client of the U.S.
04:46After all, India in that interim trade deal has already committed to buying $500 billion worth of American products over the next five years.
04:56$500 billion, India's total annual budget is only about $600 billion.
05:03So you can imagine the scale of India's commitment.
05:06And quite a bit of that commitment will have to go to buying American energy.
05:12You're making an important point, and this is what I want to take to you there in America, Zalmay Khalilzad,
05:21that you've got Donald Trump saying in an executive order issued by the White House
05:28that India has committed not to buy oil directly or indirectly from Russia.
05:32And as Brahma Chalani is saying, China gets away by buying Russian oil.
05:37EU is buying Russian oil.
05:38America is about to have an agreement on energy with Russia, possibly.
05:43So it appears from an Indian perspective, although New Delhi is not saying it,
05:47that America is trying to arm-twist India to force them to buy more expensive U.S. slash Venezuelan oil
05:55rather than buy Russian oil.
05:58Do you see it in those terms?
05:59Is this Donald Trump arm-twisting India, sir?
06:02Well, first of all, it's a great honor to be with you.
06:08U.S. and India have the objective of increasing their partnership.
06:16And a key element of that partnership, an area that I focus on security issues,
06:24is working together where there is common interest.
06:28And Ukraine, ending the war in Ukraine, is an important Indian and American objective.
06:38And one way to press for ending that conflict is reducing Russian financial resources.
06:49And oil is one of the key sources of income.
06:52Sir, but why, sir, with due regard, sir, why is the same rule not applied to a China or a EU?
06:57I mean, China is the biggest purchaser of oil from Russia.
07:02At no stage is the United States putting similar pressure on Beijing.
07:06Why only on New Delhi, sir?
07:08Well, we have put a lot of pressure on our other partners in Europe, for example, over many years,
07:14to not import Russian gas.
07:18And, in fact, that huge progress has been made due to U.S. pressure and the reduction of European purchases of Russian gas,
07:29which was a huge source of income.
07:31I think we continue to press China and Europe, almost anyone of significance that imports Russian oil.
07:44But, Ambassador, I'm going to, you know, when, you know, this is an executive order,
07:47in an executive order for the White House to say India has committed not to purchase Russian oil.
07:55I mean, it is almost as if the U.S. is now going to monitor it.
07:58In fact, that's also said that the Commerce Secretary of the U.S., Mr. Lutnik, will monitor it.
08:02I mean, is this the United States believing that they can bulldoze New Delhi?
08:08I ask you this again.
08:09Why not the same for Beijing?
08:11Why not put an executive order of similar, in a similar manner to, that involves China, sir?
08:19Well, I would respond by saying, I don't speak first for the administration.
08:25I am a private citizen, that increasing pressure on China to reduce imports of Russian oil,
08:35I would support that.
08:36This has to be taken into account.
08:38But we have pressed our partners, whether it's India or European countries,
08:47to reduce, in fact, to end the import of energy resources from Russia,
08:54because that finances the war, which we all say we want that war to end,
08:58and India has been active in its own right to help end that war.
09:05I take your point, but Casey Singh, you know, it seems a little strange,
09:11the way that executive order was framed by Donald Trump.
09:15Is this typical Donald Trump maybe catering to his domestic constituency?
09:19Or is this Donald Trump sending a message to India that, look,
09:23you follow the commitments I've said, otherwise, who knows,
09:26tomorrow morning I'll restore the 25% penalty.
09:29How should India see it?
09:30The manner in which this has been framed,
09:32and the fact that the Indian government is passing the buck.
09:35You ask the Commerce Minister, he says, please talk to the External Affairs Minister.
09:40Ask the External Affairs Minister, he says, please talk to the Commerce Minister.
09:45That's precisely what is creating the problem.
09:47You see, the management of media, we saw after Operation Sindhuur,
09:51we saw in case of a number of things, the media management is very centralized,
09:56and they try not sharing the information,
09:57rather than explaining to the media and to the people what exactly is happening.
10:02In fact, the Chinese, you see the information today,
10:04have already upped their imports from Russia.
10:07They're going to pick up that oil which India was taking immediately.
10:10It's gone up by a million barrels, and President Trump is headed to China.
10:15He's going to be talking to them.
10:16He calls it a G2.
10:18He's really treating China entirely differently.
10:20China, high tariffs were levied on China,
10:23but then he rolled them back when the Chinese used the rare earths argument
10:28and said, we'll stop the rare earths to you,
10:30which means that the way to deal with Trump is to have something in your pocket
10:36with which you can negotiate and exert counter-pressure.
10:39Whereas India has kind of sat back and we waited,
10:42and then all of a sudden we do this,
10:44and neither they nor the details are available,
10:46nor India is willing to fully explain what's happening.
10:49But you take this Ukraine war,
10:52the justification for India being forced to stop the oil import
10:56is to help stop the Ukraine war.
10:58Now, Ukraine war is affecting Europe more than it's affecting President Trump.
11:03The Europeans came and did a free trade agreement.
11:05They didn't put any condition on India
11:07that you stop importing oil from Russia.
11:10They're the ones affected by the Ukraine war.
11:12The way the Ukraine war can be ended is
11:14President Trump should be helping militarily the Ukrainians.
11:17He's pulled back that support.
11:19So, you know, it's all just a very complex argument,
11:22but very simply what he's doing is
11:23trade deals are not trade deals.
11:25Trade deals are normally about balancing trade.
11:28He's using tariffs to try influencing the geopolitics
11:33or the diplomacy of another country
11:35and make it subservient to his opinions and his views.
11:39And I think that's what's happening here.
11:41Let me give you a counter-argument.
11:42Why don't we put a condition in the trade agreement
11:44that tomorrow if he pampers Pakistan
11:47and there's a terrorist attack on India,
11:49then we'll impose tariffs on him.
11:51That would be the equivalent of this.
11:53But there he's pampering their army chief.
11:56He's talking to them.
11:57He has no problem with that.
11:58If you bring in geopolitics into trade,
12:01then India can also have arguments.
12:03And it's just not justifiable.
12:04And the government is just ducking.
12:06And that's not going to help.
12:06No, no, no.
12:07Mr. Casey is saying, what could India say?
12:09Very, very quickly.
12:10What could India say?
12:11If Donald Trump says in his...
12:13How could India respond?
12:14What is the geopolitical strategy
12:16that India has to put pressure on America?
12:19Maybe publicly not.
12:20But what you could say in private is,
12:22if you do this,
12:23we have said we'll give you zero tariffs.
12:25We don't even know if you're getting zero tariffs
12:27on how much of Indian exports.
12:30It's not clear as yet.
12:32And the punitive tariffs,
12:34there's a threat of reimposing them.
12:36Then addition is announced.
12:37Any trade with Iran means
12:39that there'll be punitive tariffs.
12:41So he's influencing your foreign policy.
12:44And you have not imposed any condition.
12:47We certainly, privately,
12:48we should have told them,
12:49if you go on pampering Pakistan,
12:51the way you are pampering them,
12:52then, I'm sorry,
12:53it's affecting India's national security.
12:55And we'll also bring it
12:57into a trade discussions.
12:58You know, we're doing trade discussions
13:00and he's doing a broad-based trade
13:02come geopolitics,
13:03come diplomacy,
13:04come strategic leverage.
13:06A complex thing.
13:08Okay.
13:09I want to bring in Brahma back on this.
13:11Brahma, Chalani,
13:12what are India's options,
13:13realistic options?
13:14Any negotiations involve
13:16an element of give and take?
13:18Given the fact that
13:19we want this trade deal at all costs,
13:21we don't want a 25% penalty.
13:24Somewhere down the line,
13:25we've had to meet the Americans
13:26halfway is the argument.
13:27I'm going to put up the numbers
13:29of how already the oil purchases
13:32from Russia have reduced significantly
13:34in the last six months.
13:36What option does India have?
13:38Can India look the Americans in the eye
13:41and say that we will not
13:42purchase Russian oil?
13:44I'll ask my producer
13:45to put the figures of how
13:47our dependence on Russian oil.
13:48And the government says
13:49private refineries have to decide.
13:51It's the reliances of the world
13:53who have to decide
13:53whether they want to
13:54get windfall profits
13:56from buying cheap Russian oil
13:59and then refining them here
14:00and then selling them
14:01in the high seas.
14:03Rastip, let me ask
14:04a counter question.
14:06How is it that tiny Singapore
14:08faces only a 10% U.S. tariff
14:11and India after all these concessions
14:16as part of the interim trade deal
14:19will face 18% tariff?
14:21Why?
14:22The reason is first and foremost,
14:26in fact, one of the cardinal principles
14:27of international negotiations
14:29is that you do not negotiate
14:31at gunpoint.
14:34You do not negotiate
14:36when the other side
14:37has imposed sanctions
14:39or unveiled threats
14:42against you.
14:43The U.S. negotiated with India
14:45after keeping India
14:47under 50% punitive tariffs
14:50for six months.
14:51It was in this period,
14:53six-month period,
14:54when India made these concessions.
14:56But now look at the structure
14:57of the deal.
14:59The structure is very important.
15:01In this deal,
15:04India's concessions
15:06are immediate and quantified.
15:09The American, quote-unquote,
15:10concessions are conditional
15:11or largely corrective,
15:14such as a reduction
15:16of previously imposed penalties.
15:18Indian commitments
15:19are to be monitored.
15:21U.S. commitments
15:22are reversible.
15:24For India,
15:25the deal is just a restoration
15:27of U.S. market excess
15:29that was taken away
15:30by the punitive tariffs
15:32of last year.
15:33But for the U.S.,
15:35the deal is a significant
15:36expansion of Indian market access.
15:39And one other point,
15:43Washington today
15:44is essentially charging India
15:45an 18% fee
15:48to enter the American market
15:50while demanding India
15:52open its own market
15:53for zero fee.
15:55This is the essence
15:56of the deal.
15:56Right.
15:57Now,
15:58how is it that Singapore
15:59is a better negotiator
16:01than India?
16:01Why?
16:03Why don't we learn
16:04from smaller countries
16:05how to negotiate?
16:07How do you negotiate
16:08with America
16:11when you are under
16:13withering 50% tariffs?
16:16You try to be the good boy.
16:18You refuse to have
16:19any counter tariffs
16:21imposed on the U.S.
16:22You decide
16:24that you will negotiate
16:26while under
16:28those draconian tariffs.
16:31The result
16:32is what we see today.
16:34I take your point
16:36but I want to also
16:38get a counter.
16:38Zalme Khalilzad,
16:39do you really believe
16:40that this,
16:42in the manner in which
16:43Brahma Chalani is putting
16:44this structure of this deal
16:46is one-sided
16:47where America is setting
16:48all the conditions,
16:49oil being one of them,
16:51do you believe
16:52that it is one-sided
16:53or you believe
16:54that is not how
16:56we should view this deal?
16:58We should view this
16:59as a major breakthrough.
17:00I am of the view
17:03that this is a major
17:04and important breakthrough
17:06although the details
17:07have to be still negotiated.
17:09It's a framework agreement
17:11at this point
17:11and that if you read
17:14the U.S. media
17:16and discussions here
17:18like India
17:19being a democratic society
17:22and polity
17:22there is a lot of criticism
17:24of the U.S.
17:26of the administration position
17:28that nothing has changed
17:31fundamentally
17:32in the Indian stance
17:34since the imposition
17:35of the additional tariffs
17:38and that this was done
17:40because of the success
17:42that India had
17:43with the EU
17:45on a free trade agreement
17:46that India stood rather firm
17:49in terms of its position.
17:51So yes, of course,
17:53both sides,
17:55analysts and those
17:56who follow this in detail
17:58will have questions.
18:01Congress would get involved
18:03in the United States
18:04and Parliament
18:05will get involved in India
18:06but I believe
18:08given the geopolitical
18:11and geoeconomic circumstances
18:13in which the world is today
18:15and given President Trump's
18:17use of tariffs
18:18as a tool
18:20which is very unique
18:21to him personally
18:23to advance U.S. interests
18:26as he sees them
18:27this is I think
18:30probably
18:32as a result
18:32of a lot of hard work
18:34and involvement
18:34of the two leaders
18:36to judge
18:38that this is
18:39at this time
18:39in the best interest
18:40of both countries.
18:4230 seconds only
18:43Casey Singh
18:44therefore going ahead
18:46do you believe
18:47when India says
18:48we are diversifying
18:49the official MEA statement
18:51is we have
18:51a diverse oil basket.
18:53Should we take it
18:54at face value
18:55a very quick comment?
18:57Well the problem
18:57is not that
18:58you won't get oil
18:59from elsewhere
18:59although Trump
19:01would like you
19:01to buy the Venezuelan oil.
19:03That's all good
19:04even Ambani
19:05is very happy with it
19:05because his
19:06refinery is like that oil
19:08but the issue is
19:10that it's likely
19:12to affect your relationship
19:13with Russia
19:13so which means
19:14oil is being used
19:15as a weapon
19:16to detach you
19:18from Russia
19:18which has been
19:19traditionally
19:20a very reliable
19:21partner ally
19:23of India
19:24and helped us
19:25during difficult times.
19:28So you know
19:28it is a way
19:29of influencing
19:30your foreign policy
19:31not just your commercial
19:32or trade policy
19:33or your petrochemical policy.
19:35That is no issue
19:36you'll get it
19:37from somewhere else
19:38and the price is low
19:39in any case
19:40at the moment
19:41unless the war
19:42breaks out in Iran.
19:43but if you allow yourself
19:46you've had a new
19:47yardstick
19:48it's been fixed
19:49which means
19:50a future president
19:51knows how to press India
19:53will press you
19:54accordingly.
19:55It means that
19:56India can be
19:57pressurized like this
19:58and that is
19:58I think you said
19:59you're setting an example
20:00which is not a good example
20:02just very quickly
20:03Rajdeep
20:03the cases
20:05of the tariffs
20:06is before the
20:07US Supreme Court
20:08it still hasn't given
20:09a verdict
20:09it's possible
20:10that the tariffs
20:11are removed anyway.
20:12Secondly
20:13you know
20:15he's going to China
20:16Trump is going to China
20:17we could have waited
20:17for that to see
20:18that his differences
20:19multiply with China
20:20he might have come back
20:21to us with a
20:22better deal.
20:24I'm going to leave it there
20:25I'm going to leave it there
20:27I've heard various
20:28viewpoints
20:28clearly this oil question
20:30will continue to roil
20:32and therefore
20:33unless there is
20:34complete clarity on it
20:35questions will continue
20:37to be raised
20:38what was the backroom
20:39deal
20:40within a deal
20:41if any
20:42that was done
20:43when it came
20:43to Russian oil
20:44Russia
20:45importantly says
20:46they have not heard
20:47anything from India
20:49on the issue yet
20:50thank you all
20:51to my guests
20:51for joining me
20:52on my talking point
20:53tonight
20:54I'm going to go to you
21:04montag
21:05I'm going to go to you
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