NEW DELHI, Mar 27: As India's diplomats negotiated an accord that would ease punitive US tariffs on the South Asian country's exports in January, New Delhi slashed its purchases of Russian crude oil in a move that was widely seen as a painful concession to President Donald Trump.
Just two months later, however, Delhi and Moscow are deepening their energy cooperation, with both sides agreeing to prepare for Russia to resume direct sales of liquefied natural gas for the first time since the start of the Ukraine war, according to two people familiar with the matter. If India decides to pursue the deal, which risks violating Western sanctions, negotiations could be concluded in weeks, one of the people said.
Details of the talks, which come amid skyrocketing energy prices triggered by the US-Israeli attack on Iran, have not been previously reported. The "verbal agreement" to negotiate an LNG deal was reached during a March 19 meeting between Russian Deputy Energy Minister Pavel Sorokin and Indian Petroleum and Gas Minister Hardeep Singh Puri in Delhi, the people said.
The two officials also agreed to further increase crude oil sales to India, which could double from January's levels to at least 40% of India's total imports in about a month, three people familiar with their deliberations said.
India became a major buyer of Russian crude that was heavily discounted after the invasion of Ukraine, which became a point of contention with the Trump administration. The world's third-biggest oil importer and consumer purchased nearly $44 billion of crude from Moscow last year, playing a vital role in keeping the Kremlin's wartime economy alive.
Delhi has separately told its energy importers to get ready to resume purchases of Russian LNG, one of the people said. India has already approached Washington about a possible sanctions waiver, according to the source and a second person familiar with the request.
AFP adds: India has reduced taxes on diesel and petrol, the government announced Friday, as the Middle East war continues to disrupt global energy supplies.
"In view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced", Finance Minister Nirmala Sitharaman said in a statement, referring to the Middle East war that began late last month.
The South Asian nation, one of the world's largest crude oil importers, relies on foreign suppliers for more than 85 percent of its oil needs -- with Russia being the biggest supplier.
Sitharaman said taxes on petrol and diesel have been slashed by 10 rupees ($0.11) a litre to "provide protection to consumers from rise in prices". She also announced charges on exports of diesel and aviation turbine fuel at 21.5 rupees ($0.23) and 29.5 rupees ($0.31) per litre. "REUTERS, AFP
