Some observers believe India finds itself stuck.
On one side we have an idiosyncratic, autocratic leader bent on upsetting the global order with delusions of making his country great again. On the other, we have Trump.
Jokes aside, we do have crucial strategic choices to make. We have to secure market access to the United States without compromising our interests on any front—in particular, our energy security that has, since 2022, leaned heavily on Russian crude. As our analysis shows, this is not as difficult a dilemma as it may appear.
A durable, low-tariff deal with the United States would lock in predictable access to the world’s largest and most dynamic economy.
It would secure a channel for employment-intensive Indian goods to the United States, where we already exported nearly $100 billion last year.
It would safeguard our enormous services exports to the United States, the destination for over 60 per cent of our IT-ITES exports.
It would also stabilise investor expectations in the largest source of investment and tech modernisation for Indian supply chains.
The goal for India should be to secure tariff relief (after August 27, 2025, tariff is up 50 per cent on some lines), clear rules of origin, and credible dispute-avoidance mechanisms. That is a deal that benefits both India and the United States, not just India giving ground.
What about oil?
Russian barrels have been a low-cost source of crude, helping manage our merchandise trade deficits (but little else) since 2022.
However, two important realities argue that there is little reason to maintain reliance on that source.
First, discounts that once made Russian grades exceptionally attractive have faded—it is now only about $2-$4 a barrel below Brent, versus roughly $20-$25 in 2022.
Second, reliability risks—from conflict-related strikes on refineries and infrastructure to insurance and logistics frictions—are structurally higher than they were two years ago.
With Ukraine taking the war to Russia, and the United States clearly signalling that it is done trying to mediate, our energy needs are less secure with Russia than with the rest of the world.
There are also considerations around our defence procurement from Russia, but we must ask ourselves—how tied do we want to remain to a defence system that lost the Cold War and is bogged down in a war it started against a country less than a tenth of its size?
All this points to thinking beyond Russia—not because of external pressure, but for our own energy and national security.
What should we do then?
First, let’s all be clear that a deal with the United States is economically and strategically very important for India. If the current tariff situation holds, we will lose lakhs of jobs and billions of dollars. If we get a deal that is better than China and Vietnam, the reverse will happen.
It is therefore crucial to keep the deal out of political point-scoring controls. We should use the opportunity to also push through reforms that we would want anyway: more flexible direct benefits for farmers to replace distortionary subsidies and price controls, simpler customs processes, and targeted reductions in duties that raise costs for our own manufacturers.
On the oil side, we need to reduce sanctions risk without moral grandstanding. Keep procurement decisions technical and low-profile.
India’s growth hinges on competitive firms selling into the world’s biggest markets.
Reliable, strategically diversified, and reasonably priced energy is one part of this growth, but we must not mistake the means for the ends.
Our national interest is paramount, and when we look at it with clear eyes, the false binary between Moscow and Washington collapses.
The author is an ex-NITI Aayog economist, as well as the founder and CEO of the Foundation for Economic Development, a policy think tank in Delhi.
The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK.