The "Oil Game," US Tariffs, and the Question of "Anti-National" Interests in India

 

The question of who truly represents "anti-national" interests in India is complex, often depending on one's understanding of "national interest". This discussion takes center stage when examining India's energy policies, its trade relations with the United States, and the role of large corporations in a globalized economy. The debate extends beyond traditional political lines, touching upon the lives of farmers, laborers, and the economically vulnerable, contrasting their struggles with the monopolization of profits by a select few.

The Geopolitics of Oil and US Pressure

Geopolitics and crony capitalism remain deeply intertwined with the "oil game". The United States, particularly under former President Donald Trump, placed India in the highest category of tariff countries due to its decision to purchase oil from Russia, while offering Pakistan significantly lower tariffs and cooperation in oil exploration. This stance was based on the US argument that buying Russian oil supports the aggression in Ukraine.

Despite this, India lacked a strong moral stand or courage in dealing with these tariff wars, often appearing to compromise and "surrender" rather than assert its independence. This was exemplified by the removal of the Google Tax under US pressure. The US also made claims about mediating the India-Pakistan conflict, with Trump stating he stopped the war, a claim that India's Prime Minister reportedly did not publicly refute in Parliament, leading to criticism regarding the perceived silence as a "master stroke" strategy.

Devastating Impact of US Tariffs on Indian Industries

The imposition of 50% tariffs by the US has had a devastating impact on various Indian industries, particularly Micro, Small, and Medium Enterprises (MSMEs).

• Textile Sector: Tirupur, India's garment capital, which accounts for 30% of India's garment exports, saw effective tariff rates on knitted garments soar to 63.9%. This makes Indian manufactured clothes prohibitively expensive in the American market, threatening the livelihoods of small business owners and laborers.
• Diamond Polishing: Surat, a global diamond polishing hub, heavily dependent on the American market, is seeing a $1 billion export value directly impacted by new tariffs.
• Chemical and Organic Chemical Exports: 40% of India's chemical and organic chemical exports to the US market are under threat.
• Leather and Footwear: Exports worth $1.2 billion face a 50% tariff, jeopardizing major markets for leather manufacturers in Tamil Nadu's Ambur and Uttar Pradesh's Kanpur.
• Seafood Exports: The American market accounts for 40% of India's seafood exports, valued at ₹60,000 crore. Industry leaders have called the tariff news a "doomsday" for the sector, impacting fishing and shrimp farming communities from Kerala to West Bengal.

Concerns also remain about potential US tariffs on India's service sector, including IT and BPO, which are already experiencing job losses.

The "Oil Game": Who Benefits from Cheap Russian Crude?

The Russia-Ukraine war dramatically shifted India's oil import landscape. Previously, India sourced most of its petrol from the Middle East; now, a significant portion comes from Russia. India's crude oil imports from Russia, which were around 2% before the war, have surged to over 40%. Russia has been offering substantial discounts, ranging from 25% to 50% below global prices, or $5 to $30 per barrel cheaper. In 2024, India purchased 1.8 million barrels of crude per day from Russia, accounting for about 37% of Moscow's total oil exports.

However, the benefit of this cheaper oil is not reaching the common Indian consumer. While many hoped for lower petrol prices, potentially saving families hundreds of rupees monthly, the prices remain high. Instead, the advantages appear to be concentrated in "one family" and private companies.

• Reliance Industries: Reliance's oil refinery in Jamnagar, one of the world's largest refining complexes, along with Nayara Energy (a Russian company), significantly increased their import of Urals crude after the war. Reliance, whose 60% profit comes from petrochemicals and oil, sealed a deal with a Russian company to import 5 lakh barrels per day. Before the war, Reliance imported only 8% of its crude from Urals; this drastically increased, making private refineries the biggest beneficiaries of the conflict.
• Windfall Profits: Reliance recorded profits of approximately $10 per barrel, and Nayara Energy saw margins of $15 per barrel. These margins, multiplied by millions of barrels daily, resulted in tens of thousands of crores in windfall profits.
• Windfall Profit Tax: The government did impose a windfall profit tax on these massive earnings, reviewing it every 15 days. However, experts noted that Reliance continued to maintain good profit margins despite the tax. The tax was eventually removed, and a law was passed to prevent the imposition of such a tax in the future, leading to questions about whose interests were being served.
• Government-Owned Refineries: While state-owned refineries also saw their dividends increase to about $1 billion in 2024-25 (a 255% rise from 2022-23), this money went into government coffers, with no direct benefit passed on to the common citizen.

Ultimately, American pressure has led to government-owned companies being discouraged from buying Russian oil.

The Ethanol Blending Policy: Another Burden on Citizens

To reduce reliance on oil imports, the government is promoting the blending of ethanol into petrol, aiming for a 20% blend. However, this policy also brings challenges and criticisms:

• No Benefit to Consumers, Potential Harm: Like the cheap Russian crude, the benefits of ethanol blending are not reaching the common person. Instead, customers and experts report that ethanol damages vehicle engines, with car companies acknowledging potential damage and insurance companies refusing coverage for such issues.
• Food Security Concerns: Ethanol is produced from food crops such as sugarcane, wheat, and corn. In a country where the government provides rations to 80 crore people, using food crops for fuel raises serious concerns about food security and the stability of food prices, making food potentially unaffordable for the poor.
• Water Scarcity: Crops like sugarcane are water-intensive, and their use for fuel production could exacerbate water scarcity in already vulnerable areas.

The Burden on the Common Citizen: Monopolization of Profit, Socialization of Loss

The overall picture painted is one of "monopolization of profit and socialization of loss".

• Private companies reap immense profits from cheap Russian oil.
• The government collects significant revenue from fuel taxes. Central excise duties alone brought in ₹2.73 lakh crore last year, a nearly five-fold increase on diesel and double on petrol since 2014-15. This money's allocation remains questionable, with concerns about public infrastructure like bridges, hospitals, and schools.
• However, the burdens of US tariffs and potential food insecurity fall squarely on the entire nation, particularly the common citizens. This is further compounded by the practice of writing off corporate loans, while small loans of ordinary citizens remain unpaid.

The video concludes by reiterating its definition of an "anti-national": "those who harm the country for their own benefit, and impose the burden of tariffs on the people to increase their private wealth". This perspective directly links corporate interests, government policies, and international relations to the well-being of the ordinary Indian citizen.