US tariff waiver on Russian crude a comforting relief, but trade uncertainties
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Sinha, Chief Economist at CareEdge, told ANI on Saturday that while the tariff waiver provides comforting relief, India must remain cautious amid uncertainties in global trade dynamics.
Addressing the threat of steep US tariffs, Sinha noted that markets viewed the rhetoric primarily as a negotiating technique rather than an immediate structural threat.
ALSO READ | Trump’s 100% Russian oil tariff U-turn has a catch India can’t ignore
"Up to 100% tariff that the US had threatened India with, we were not much concerned about it," Sinha said. "We viewed that more as a negotiating technique by the US".
However, she cautioned that the reprieve might be temporary, underscoring the importance of securing a comprehensive bilateral trade deal with Washington.
Sinha highlighted that the waiver benefits the United States just as much as its trading partners, given Washington's own energy security concerns and widening diesel crack spreads.
ALSO READ | 500%, 100%, then a waiver: How India escaped Trump's Russia tariff threat
With global oil markets remaining volatile, she pointed out that India's refined petroleum products are vital for helping the US curb domestic inflation.
On the energy front, Sinha noted that while Russia has become a critical source supplying over 30 per cent of India's crude imports, the historical discounting advantage has significantly narrowed.
Russian crude currently trades at around $117 per barrel compared to Brent spot prices near $120.
"The benefit that India enjoyed in terms of lower Russian oil, that has really, I would say, dwindled," Sinha remarked, adding that Russian imports now serve primarily to secure steady, reliable energy availability rather than steep price discounts.
Despite high crude prices, India's macroeconomic buffers remain resilient.
Sinha projected the current account deficit (CAD) to stay comfortably between 0.8 per cent and 1.2 per cent of GDP, supported by robust double-digit growth in merchandise and services exports.
Headline inflation is expected to average around 5 per cent for the fiscal year, though persistent crude prices above $100 per barrel could pose upside risks if passed on to consumers.
On the currency front, she attributed recent rupee depreciation primarily to adverse global sentiment and foreign capital flows rather than weak domestic fundamentals.
Turning to the fiscal deficit, Sinha noted that healthy direct and indirect tax collections will provide a substantial cushion.
Concluding with the government's disinvestment pipeline, she addressed market debates regarding the IDBI Bank stake sale.
Backing the move, Sinha stressed that the transaction represents a positive step toward meeting budgetary targets and reducing the state's footprint in the commercial sector.
"I do not see any concern for the banking sector," Sinha affirmed, noting that India's banking health and robust NPA metrics remain well-positioned.
The move comes after US President Donald Trump waived the sanctions provisions under the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which could have imposed tariffs of up to 100 per cent on goods imported from the five largest buyers of Russian crude oil or natural gas, including India and China. Trump invoked Section 115 of the Act, citing US national interests, amid a diesel supply deal with Russia.
India had conveyed its concerns to Washington over the legislation, with the Ministry of External Affairs on Wednesday, reiterating New Delhi's position that stability in global energy markets must be maintained. (ANI)
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CareEdge Chief Economist Raj Sinha said the US decision to waive sanctions provisions that could have led to tariffs of up to 100% on India offers economic relief, but New Delhi must remain cautious and pursue a comprehensive trade deal with Washington.
In the high-stakes arena of global energy politics, Washington's decision to pull back on its aggressive tariff threats has handed India crucial macroeconomic breathing room, according RajSinha.Sinha, Chief Economist at CareEdge, told ANI on Saturday that while the tariff waiver provides comforting relief, India must remain cautious amid uncertainties in global trade dynamics.
Addressing the threat of steep US tariffs, Sinha noted that markets viewed the rhetoric primarily as a negotiating technique rather than an immediate structural threat.
ALSO READ | Trump’s 100% Russian oil tariff U-turn has a catch India can’t ignore
"Up to 100% tariff that the US had threatened India with, we were not much concerned about it," Sinha said. "We viewed that more as a negotiating technique by the US".
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However, she cautioned that the reprieve might be temporary, underscoring the importance of securing a comprehensive bilateral trade deal with Washington.
Sinha highlighted that the waiver benefits the United States just as much as its trading partners, given Washington's own energy security concerns and widening diesel crack spreads.
ALSO READ | 500%, 100%, then a waiver: How India escaped Trump's Russia tariff threat
With global oil markets remaining volatile, she pointed out that India's refined petroleum products are vital for helping the US curb domestic inflation.
On the energy front, Sinha noted that while Russia has become a critical source supplying over 30 per cent of India's crude imports, the historical discounting advantage has significantly narrowed.
Russian crude currently trades at around $117 per barrel compared to Brent spot prices near $120.
"The benefit that India enjoyed in terms of lower Russian oil, that has really, I would say, dwindled," Sinha remarked, adding that Russian imports now serve primarily to secure steady, reliable energy availability rather than steep price discounts.
Despite high crude prices, India's macroeconomic buffers remain resilient.
Sinha projected the current account deficit (CAD) to stay comfortably between 0.8 per cent and 1.2 per cent of GDP, supported by robust double-digit growth in merchandise and services exports.
Headline inflation is expected to average around 5 per cent for the fiscal year, though persistent crude prices above $100 per barrel could pose upside risks if passed on to consumers.
On the currency front, she attributed recent rupee depreciation primarily to adverse global sentiment and foreign capital flows rather than weak domestic fundamentals.
Turning to the fiscal deficit, Sinha noted that healthy direct and indirect tax collections will provide a substantial cushion.
Concluding with the government's disinvestment pipeline, she addressed market debates regarding the IDBI Bank stake sale.
Backing the move, Sinha stressed that the transaction represents a positive step toward meeting budgetary targets and reducing the state's footprint in the commercial sector.
"I do not see any concern for the banking sector," Sinha affirmed, noting that India's banking health and robust NPA metrics remain well-positioned.
The move comes after US President Donald Trump waived the sanctions provisions under the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which could have imposed tariffs of up to 100 per cent on goods imported from the five largest buyers of Russian crude oil or natural gas, including India and China. Trump invoked Section 115 of the Act, citing US national interests, amid a diesel supply deal with Russia.
India had conveyed its concerns to Washington over the legislation, with the Ministry of External Affairs on Wednesday, reiterating New Delhi's position that stability in global energy markets must be maintained. (ANI)
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(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.)
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Source: Economic Times — Energy ↗
Figures reflect the source report and its stated period. This article is for information and is not investment advice.
