US Tariffs Spark Pressing Debate on India’s Vitality Dependence, ETCFO
New Delhi: When a commerce warfare makes its option to the gas pump, the ripple results will be huge. The latest 50 per cent tariff on Indian exports introduced by US President Donald Trump isn’t just a headline about geopolitics — it might imply an extra $11 billion a 12 months on India’s oil import invoice.
For a rustic that imports almost 90 per cent of its crude oil, the event has put power safety again within the highlight. Aruna Sharma, Coverage Advisor, Improvement Economist, and former Secretary Metal, Authorities of India instructed ETEnergyWorld that the episode is “a stark reminder of India’s persistent power vulnerability to unpredictable diplomatic shifts and new international political alliances”.
India has referred to as the tariffs “unjust, unfair, and unreasonable”, with Prime Minister Narendra Modi reaffirming the push in direction of power self-reliance and maximising home manufacturing.
Why is India susceptible?
India’s dependence on imported crude means international disruptions — whether or not political, financial, or security-related — can straight have an effect on home gas costs and provide. Consumption is projected to rise within the coming a long time, making the import reliance an ongoing danger.
Sharma mentioned that the nation should “quickly scale up home exploration and manufacturing” to scale back publicity to such shocks.
What coverage adjustments are being instructed?
Extending contracts: Oil and fuel fields below manufacturing sharing contracts (PSCs) nearing expiry danger shedding funding until phrases are prolonged till the financial lifetime of the sector.
Aligning PSC and RSC phrases: Granting PSC operators the identical flexibility as income sharing contracts (RSCs) might forestall disputes and velocity up undertaking execution.
Streamlining operations: Self-certification might minimize paperwork and speed up execution by as much as 12 months.
What about funding and taxation?
Capital-intensive deepwater and ultra-deepwater tasks want overseas and personal funding, however excessive taxes and royalties — which ship 60–70 per cent of producer income again to the federal government — stay a deterrent.Sharma really useful focused fiscal reduction like royalty waivers, tax incentives for marginal fields, and assist for enhanced oil restoration.
What about GST?
Bringing oil and fuel below GST would let E&P corporations declare enter tax credit, decreasing prices and enhancing undertaking viability.
What’s the key message?
Sharma added that the federal government ought to see the present disaster as a wake-up name and never permit its power coverage to be dictated by exterior strain or international alliances. The nation should double down on its home manufacturing ambitions, with urgency, readability, and political will.
