India won’t rush into signing trade deals: Minister; US pact ‘very soon’

India will not accept limits on its trading choices or rush to sign agreements, Trade Minister Piyush Goyal said on Friday, even as a senior government official said a bilateral trade deal with Washington was “very near.”

“India will not sign any trade deal in a hurry,” Goyal said during a speech at the Berlin Global Dialogue, referring to European Union and the US concerns over India’s continued purchases of Russian oil.

Alongside ongoing EU free trade pact negotiations, India is in trade talks with the United States, which has imposed 50% tariffs on Indian exports.

US President Donald Trump said this week he spoke with Indian Prime Minister Narendra Modi mainly about trade, and that Modi had assured him India would limit its oil purchases from Russia. Goyal said New Delhi would take a measured approach.

An official aware of the ongoing trade talks with the US told reporters in New Delhi that two countries are sorting out the language of their agreement.

“We are very near as far as deal is concerned,” the official said, adding that both countries are “converging on most of the issues.”

New Delhi has been resisting US demands to allow market access for American grains and dairy, citing the need to protect the livelihoods of small farmers. But India could consider allowing some corn and soymeal imports, trade and industry sources said.

After the United States sanctioned Russia’s top oil producers on Wednesday, Indian refiners - major buyers of cheap Russian oil - said they are set to sharply cut imports, potentially clearing a key hurdle to a US-India trade deal.

Goods exports to the US fell to $5.43 billion from $6.87 billion in August, as tariffs hit shipments of goods such as textiles, shrimp, and gems and jewellery, data released by the Commerce ministry showed.

The EU, United Kingdom and the United States are pressuring New Delhi to scale back imports of discounted Russian crude, which the Western nations argue help fund Moscow’s war effort in Ukraine.

India has long defended its energy purchases as essential for ensuring affordable supplies and energy security, but Indian refiners are now poised to sharply curtail imports of Russian oil to comply with new U.S. sanctions on two major Russian producers.

Indian oil refiners can shift away from Russian crude after Donald Trump imposed sanctions on Moscow’s two largest oil companies — but the move will come at a cost, analysts said on Friday.

Trump has claimed that Indian Prime Minister Narendra Modi has agreed to cut its Russian oil imports as part of a prospective US trade deal — something New Delhi has not confirmed.

Relations between the countries plummeted in August after Trump raised tariffs on Indian exports to the United States to 50 per cent.

US officials have accused India of helping to fund Russia’s war in Ukraine by buying discounted oil from Moscow.

There has been no immediate response from India’s foreign or oil ministries since Washington announced the sanctions on Wednesday.

“The key is to what extent Modi bends to the American will,” Jorge Montepeque of ONYX Capital said, adding that the “initial responses were that the state oil companies were very cautious.”

Oil prices jumped more than five percent after the US sanctions were announced.

“Any recalibration means... paying more for alternative oils,” Montepeque told AFP. “One of the areas would be the Middle East and the price is shooting up.”

Reliance Industries, the privately-owned main Indian buyer of Russian crude, said it was assessing the implications of Washington’s restrictions, as well as those imposed this week by the European Union.

“We will comply with the EU’s guidelines on the import of refined products into Europe,” a spokesperson for the company said, and with any guidelines from the Indian side.

The European Union’s new curbs include a complete ban on Russian liquefied natural gas (LNG) imports by the end of 2026.

Reliance said it was confident that its “time-tested, diversified crude sourcing strategy” would ensure stability in refinery operations for meeting the domestic and export requirements, including to Europe.

OIL VERSUS TARIFFS: India, one of the world’s largest crude oil importers, relies on foreign suppliers for 85 per cent of its oil needs. Long dependent on Middle Eastern producers, New Delhi began purchasing heavily discounted Russian crude in 2022, capitalising on Western sanctions that limited Moscow’s export options.

India imported just over 1.6 million barrels per day from Russia in September, according to trade intelligence platform Kpler.

Kpler, in Oct.21 comments made just before the sanctions, said that the economics were “compelling.”

“Russian barrels remain deeply embedded in India’s energy system for economic, contractual, and strategic reasons,” it said. “Russian crude remains structurally vital for India, accounting for roughly 34 percent of its total imports and offering compelling discounts that are too significant for refiners to ignore.”

Agencies