Tariffs, oils and a difficult handshake

Hello, it’s Spriha Srivastava, CNBC International Executive Editor -in -Chief, written from London. This week, I look more closely at the walk in India – tariffs from Washington, oil from Moscow and a difficult handshake with Beijing. Let’s plunge.

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Draw this: You are at dinner with three friends who are fighting. One of them is the fight against everyone, the other – slips you secret notes under the table, and the third is the old french that you want to avoid but cannot ignore. Awkward, huh?

This is where India turns out. Washington is raising tariffs, Moscow supports India’s energy accounts with cheap oil, and Beijing, despite the bruises, is preparing to welcome Prime Minister Narendra Modi at the SCO summit this week. The act of juggling India on the world stage never looked more complicated and more next.

Trade from the United States became a Flash point. Washington imposed 25% of mutual imports from India, after which another 25% is a fine related to Russian oil in India. This leaves duties on some Indian exports up to 50%. The US is the only largest export market in India, costs about $ 87 billion a year, which is almost a fifth of total goods. Key Indian sectors such as diamonds, clothing and seafood are especially subjected to.

Think what it means on earth. Diamond Polisher in Gujarat, Tirupura’s clothes and seafood processors in Kerala depend on the US orders. Electronics and pharmaceuticals will be spared yet, but other sectors that work millions are suddenly exposed.

The tariff fight occurs even when two countries deepen strategic connections. A number of US and India fronts cooperate; For example, both countries are expanding the defense cooperation that work together in the ATVs and promoting the semiconductor deliveries.

Large American firms including Apple. Microsoftand Amazonincreased their investment in India in recent years. However, trades are complicating the relationship, raising the question in Delhi: Does Washington view India as a real partner, or just another trading problem for managing?

Now let’s turn to Russia. India-third in size consumer in the world, which is burned through more than 5 million barrels a day, so cheap energy is not luxury. In 2021, only 1% of India came from Russia. Today it is more than 35%About 1.75 million barrels per day, saving Delhi over $ 17 billion since the beginning of 2022, According to analysts estimates. These discounts supported inflation in the check and gave their breathing place at home.

But there is a second layer here. India goes through the geopolitical rope, and Pakistan’s tension threatens to boil. In this context, Russia is a vital security partner and the main thing in the procurement of India’s defense, which burns Delhi to get rid of without weakening his security.

Catch? Washington is not impressed. US officials, including Peter Navarre and Scott, claim that Delhi is “arriving”, paying above the price of $ 60 in Russian oil and exporting exquisite fuel back to Europe.

Then comes Beijing, which is perhaps the most difficult relationship of all. Modi is preparing for her first trip to China for more than seven years, where he will meet with President Xi Jinping and stands next to Russian President Vladimir Putin. While Beijing says the event is a demonstration of solidarity, the tension between India and China remains unresolved.

Border clashes in 2020 killed at least 20 Indian soldiers, which caused a high -level freezing. Since then, India has banned hundreds of Chinese applications, strengthened the rules of foreign investment and promoted independence in key sectors. However, trade between the two countries still reached $ 118 billion last year, with India importing much more than exports. This imbalance is upset by Delhi, but also emphasizes why the cut ties are not realistic.

Analysts say Modi is unlikely to provide a serious breakthrough when Tianjin visits. But to show itself a signal by itself – that India is ready to keep the lines of communication open, even deepening the protection with Washington and buying cheap oil in Moscow.

Puts back and India’s position looks clearer. The US is his biggest client, but his most violent critic. Russia continues the light, but for a political price. China is an opponent next door, but too big to ignore. Delhi calls her approach to “strategic autonomy”. It has worked for decades, but today the balancing act is under a bigger pressure than if it is.

That returns us to this dinner. India wants all three guests to remain seat, as it may be. The real test is whether the Modi can stop anyone from the knocking table, throwing a fork and storm.

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Richard Rosov, Senior Advisor and Chairman on India and Asia Economics at the Center for Strategic and International Studies (CSIS), said the transaction between the US and India is “still very possible”, as the country of South Asia teaches significant sweeteners.

Arnab Mitra, India Consumer Analyst in Goldman Sachs, said in India a mass revival of consumption caused by rural demand and upcoming GST reforms.

Meyer Shankar, a former Indian ambassador to the US, said India would not be able to fully open its agricultural sector with internal political sensitivity.

Need to know

Trade negotiations between India and the US are ongoing. Indian Foreign Minister Subrahman Yashankar said in India “Some red lines in negotiationsto support and defend.

India and Russia again confirm the increase in bilateral trade. In two countries there are promised to expand their trade ties During the hefty tariffs of US President Donald Trump in New Delhi on the occasion of Russian oil purchase, they are unlikely to affect their partnership.

The former Governor of the Indian Reserve Bank calls on India to overestimate Russian oil purchases. Ragur Rajan said hefty Trump tariffs Send New Delhi Clear “call to wake” to reduce its addiction per trading partner. He added that it was important for India to “ask who the benefits and who suffered.”

– Amala Balarshner

Landmark Nifty 50 decreased by 0.85%, while the BSE Sensex index decreased by 0.87%. The 50-fold Nifty 50 has grown more than 3% since the beginning of the year, and BSESEX-2%.

The 10-year validity of the government government bond in India has fallen to 6.58%.

Applicable

August 28: Industrial and Production Production for July

August 29: GDP for the second quarter

August 29-30: Prime Minister Narendra Modi visits Japan to participate in India-Japan’s annual summit

September 1: HSBC Production PMI for August

September 3: HSBC Services PMI for August; Pharmaceutical studies and manufacturer Anlon Healthcare, Engineering and Construction Firm Vikran Engineering Launch IPO IPO

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