By R. Sasankan

India is the only nation that has refused to wilt under pressure from a rampaging President Donald Trump who has used all the firepower in his arsenal - humongous trade tariffs, extortionist tactics to draw foreign investments into America, threats to end birth right citizenship, and a staggering $ 100,000 annual fee for an H1B visa - to subjugate some of US's closest allies and trading partners.

It is to Prime Minister Narendra Modi's credit that he has stood resolute in the face of Trump's provocative talk and tariff tantrums. The question that weighs on everyone's mind today is this: how long will Modi be able to withstand Trump's escalating barrage of belligerent talk and executive action? Modi is arguably the lone world leader who has dug in his heels and refused to kowtow to a bully.

Modi has clearly signalled that he will not negotiate a trade deal with the Trump administration under the threats of high tariffs and economic sanctions designed to halt the purchase of Russian oil and gas. A thwarted bully is a dangerous opponent. The Indian Prime Minister and his government must now brace for more unpleasant attacks designed to stall the Indian economic juggernaut that still prides itself on being one of the world's fastest-growing economies. Trump has already characterized India as a "dead economy" in one of his many fulminations, and it remains to be seen who will blink first in this engaging war of wills between the two leaders.

But it is important for us to first get the red herrings out of the way. Trump has used a number of logical fallacies to mask the true intention behind his aggressive ploys to subjugate India. Trump has cited India's import of Russian oil as the excuse for imposing the incredibly high tariffs. The US claims that Russia has been financing its war against Ukraine with the money from its sale of crude oil to India.

The justification for the 50 per cent retaliatory tariff on Indian exports is the decades-old skew in trade between the two countries. In calendar 2004, India had a goods trade surplus of $ 45.8 billion, according to the US Census Bureau. In the period between January and July this year, the overall goods trade deficit has risen to $ 40 billion from $ 27.5 billion in the same period in 2024.

What these figures suggest is that the scare of tariffs hasn't quelled Indian exports to the US. Moreover, China - which has a larger trade surplus with the US at $ 128.6 billion in January-July this year - has been penalised with just a 30 per cent tariff. In China's case, the tariff sabre-rattling has indeed had some effect with imports from China to the US down this year from the $ 157.3 billion in the first seven months of 2024.

It is time to call out Trump's bluff and baloney over real reason for the tariffs on India. The US wants to crack open the Indian market - salivating at the prospect of selling its products to a vibrant, upwardly-mobile demographic. So, far from being a "dead economy", India is growing base of retail consumers with bigger wallet spends than any time before in history. US Commerce secretary Howard Lutnick let the cat out of the bag recently when he cavilled in frustration: "India brags that they have 1.4 billion people. Why won't 1.4 billion people buy one bushel of US corn?" Clearly, tariffs is the bogeyman that is being used to arm twist India into granting -market access to American farm exports. As the US economy slows, it must persuade India to become receptive of US goods in areas where it is almost self-reliant. Why would Modi want to destroy the livelihood of Indian farmers just to curry favour with Trump - and invite a political backlash?

In the area of petroleum, both Russia and the US are drawn by India's continental size market which both desperately need to tap into. After all, India is the world's third largest importer of crude oil and fourth largest importer of LNG. It could very easily clamber up the ranks in a year or two.

The US has of late emerged as the world's largest producer of crude oil and LNG. Russian crude in recent months enjoy a 37 per cent share in India's import basket. Obviously, US crude cannot make a dent in the Indian market as long as Russia commands a huge market share. President Vladimir Putin has a very clear edge: he can - and has - offered huge price discounts on its crude supply that Trump cannot match because he does not control the US commercial entities.

The real issue, therefore, is how can the US grab a large slice of the Indian market at a time when the country is clearly poised to become the world's third-largest economy. It can become very unseemly for the US President to openly wrangle over market access - and, therefore, the Ukraine war is a great Trojan horse that he can trot out.

But the controversy is not over Russian crude oil alone. India also needs Liquefied Natural Gas (LNG) in large quantities. Russia holds the world's largest natural gas reserves and is a major producer and exporter of natural gas, though its LNG production is smaller than its pipeline exports. The country's production is concentrated in Siberia, with the state-run company Gazprom controlling a vast majority of reserves. Russia's LNG production was 33.5 billion cubic metres in 2022, with exports recorded at 32.9 bcm.

Indian companies like GAIL are already exploring the possibility of acquiring gas fields in the US to produce LNG there and transport it to India. But Modi now needs to quietly start working on plans to collaborate with Russia in creating LNG ventures.

In 2021, Russia was the world's second-largest producer of natural gas, producing an estimated 701 billion cubic metres of gas a year, and the world's largest natural gas exporter, shipping an estimated 250 bcm a year. In 2022, the export market shrank dramatically after the outbreak of the war in Ukraine.

According to The World Factbook, Russia also has the largest proven LNG reserves (47 trillion cubic metres). BP estimates Russian reserves at 33 tcm. Additionally, Russia is likely to have the largest volume of undiscovered natural gas deposits, an additional 6.7 tcm, according to US Geological Survey's estimates in 2011.

The Modi government is committed to raising the share of natural gas in the country's energy mix to 15 per cent by 2030. It currently stands at less than 7 per cent. A large section of Indian consumers cannot afford to buy spot LNG. The most sensible option, therefore, is to set up joint venture LNG projects overseas. Russia is the obvious place to strike deals for LNG ventures.

The road ahead is full of pitfalls. Modi will need to carefully pick his way through a minefield of challenges. His critics will wait for him to stumble. But his vast majority of supporters will be egging him on to stand firm, hoping that he doesn't buckle under pressure from threats and barters away India's sovereign interests.