00:00Your first reactions to what you've heard Donald Trump do and I want to pose that question.
00:05Is it now Russian oil versus US free trade agreement? What do you believe is in India's
00:10interest? Thanks Rajdeep. This whole thing reminds me of this statement, you know,
00:15never argue with a fool. They'll drag you down to their level and beat you with experience.
00:20And I think in following Donald Trump, we have to be very careful in how we respond.
00:25And we should not follow his lead in two things. The first is that we should not make public any
00:31agreements or disagreements. And for the first half of our handling of this affair, we were being very
00:37careful about this. We were doing strategic backroom deals instead of trying to drag this fight out into
00:42the public. And I think we should continue that strategy. It was a great strategy. The second
00:48thing is we should stop phrasing trade as a win-loss kind of affair. Trade is win-win.
00:54If we manage to get a trade deal with the USA, it is a win for the USA. It is a win for India.
01:02This is a mistake on Donald Trump's view that he thinks that trade is win-loss. He thinks that the
01:08US is losing when it is trading with other countries. This is simply not true. So we should not follow
01:15that. When it comes to the US versus Russia, my personal opinion is that the US matters a great deal
01:21more than Russia. Russia is a power of the past. The US is the largest economy in the world. It's
01:27one of the most technologically advanced countries in the world. It's a very complementary economy to
01:32ours. It is a fantastic trading partner. I don't think there is any doubt when it comes to choosing
01:38between the two. There are transactional minor wins on one side and huge strategic wins on the
01:44other. The choice is clear. That's an interesting argument to take forward, William Buter. Do you believe
01:54it's as stark as that, that India should be focusing more on managing its relationship with the US, hopefully
02:01working towards a trade agreement rather than getting caught up in its oil transactions with Russia
02:10Russia? And therefore, the choice in that sense, may at some, is Donald Trump pushing India to make
02:17that choice? And is that a choice that should be made, choosing the United States in a trade deal
02:22with the US over importing relatively cheap oil from the Russians? I think it is a very easy choice, actually.
02:31Yes, Russian oil is cheaper than alternative sources of oil that are available from the Middle East,
02:43especially. But there's no doubt that India could profitably refine and re-export oil that does not come
02:54from Russia. The second point, which I think people don't focus on much, is that Russia may not be able
03:03to reliably supply oil in the future if Ukraine gets the long-distance missiles, you know, the Tomahawks,
03:11et cetera, that is asked for, in which it could disrupt the ability of Russia to be an oil supplier. So,
03:19these are sort of two practical reasons. More generally, the US and, of course, the EU are much more
03:29important trading partners than Russia. Russia all provides its oil at a profitable margin, but not
03:37enough, I would think, to risk a non-agreement on trade with the US.
03:46Let me get in. Alexander Slater, MD Capstone from Washington DC. Your views, Alexander, is that
03:57is that a choice that Donald Trump is pushing India to make and should India hold off in its national
04:02interest? According to you, at the moment, our figures show we import about 35 percent of our oil
04:07basket through Russia, but we are diversifying. Is it in India's interest, you believe, to diversify
04:13our oil basket?
04:17Thanks for inviting me to join the conversation. It's wonderful to be here with the distinguished
04:20panelists and to especially see my friend Ashok Malik. Good to see you, Ashok.
04:25Look, it's not for me to tell India what its interests are, but I do think that the facts speak
04:30for themselves, and I think some of the panelists who have preceded me have eloquently stated that.
04:35Some other facts that are of interest are that since the tariffs were imposed, the price of oil has
04:43gone down 10 percent, and the discount that India was paying on Russian crude was about 5 percent.
04:49And so whatever cost India may have had to foot in terms of diversifying away from Russian crude has
04:56basically evaporated if you were comparing the situations today to August. So that's sort of the
05:02first thing. I think these questions about the reliability of Russian sources is a very good one.
05:07You've seen that Ukraine, even without the Tomahawk missiles, has stepped up its attacks on Russian
05:13energy infrastructure to great effect in Russia, where energy prices have gone up significantly
05:19and they're on the verge of energy rationing for Russians. And so these are things that I think
05:26are in India's interest to consider when they think about that side of the ledger. On the other side
05:31of the ledger, I think it's actually quite clear that the impact of the tariffs has been very negative
05:35for the Indian economy. Goods exports to the United States are down 50 percent, I think, over the last four
05:41months with the new data in from September. And that's why the rupee has depreciated five percent
05:48against the dollar over that same period. You would not expect anything like that to happen
05:53when effectively Indian goods in the United States are becoming cheaper. You would expect Americans to
05:58buy more of them, not less. But this you see the impact of the tariffs and you see the tariffs having
06:03a major impact, especially since the 50 percent came into effect in August, where the goods
06:09purchases from India by Americans have gone down 12 percent in that period. And you see having a very
06:15big impact on areas of the Indian economy like textiles, jewelry and even some electronics, steel
06:23and chemicals. And so all of these calculations have to be balanced against one another. And it seems based
06:29on, I think, some of the things the prior panelists have said and the economic data that this is trading in a negative direction.
06:35You know, just let me put that before I come to Ashok in some stark terms for our for our viewers.
06:46Cheap oil from Russia or trade deals with America is a dilemma of sorts. The United States remains
06:53India's top trading partner. Total bilateral trade touched nearly 132 billion in FY 2425. India,
07:01importantly, enjoys a surplus here. Of course, tariffs have, in a way, weakened some of the key
07:07sectors like textiles, gems and jewelry. We export more over 86 billion dollars worth of goods than we
07:14import. This is prior to the tariffs coming in. With Russia, it's the opposite story. Despite being only
07:19our fourth or fifth largest partner, India now imports over 63 billion dollars worth of Russian goods,
07:26mainly discounted oil, exporting less than five billion. That's a trade deficit of nearly 59
07:32billion dollars. Just putting that in some kind of context. Therefore, Ashok Malik, do you believe
07:37Donald Trump is willy-nilly pushing India to make certain choices? What might have been seen in India's
07:42interests a few months ago, there are those who claim it was in the interest of big business,
07:47who are doing the oil deals, not necessarily the consumers. That is a separate dispute. But do you
07:52believe that the time has come for India to re-look at the way they've benefited from Russian oil,
07:59but now need to benefit for the trade deal with the U.S.?
08:02One, India needs the trade deal with the U.S. India also needs reasonably priced energy. There is no
08:20binary choice here. India needs both. It's the responsibility of effective diplomacy and imaginative
08:27tradecraft to make sure both happen. In 2022, when the Ukraine war began, reasonably priced energy
08:34entailed an enormous amount of imports from Russia because other sources were not available. For example,
08:41Saudi Arabia stopped producing excess oil. For its own reasons, whatever reasons, it stopped producing
08:48oil. Today, Saudi Arabia is pumping out oil. Other sources have become available. The discount at which
08:55Russian oil is available has declined has declined. And organically, Indian buyers, public sector buyers,
09:02private sector buyers will make market-driven choices, some of which might see some diversification from
09:09Russia. The second point, please look at Trump's statement today in response to an answer to a question.
09:15In response to a question. His tone was collaborative. It was even dignified. He spoke about a gradual decline,
09:24not tomorrow morning, but a gradual decline. He even said, once the war is over, we're doing this to put
09:30pressure on Russia. Once the war is over, India can go back to buying Russian oil. This is all very different
09:35from the rhetoric coming out of the Trump administration a few weeks ago, which leads me to believe that some
09:41background diplomacy is working. And the third point I'd like to raise, is Mr. Trump giving himself wiggle
09:48room and the political pathway to diluting or removing the 25% sanctioned tariffs which he imposed on
09:57India, which is the key question. And the proof of the pudding lies there.
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