By Sanskriti Global Exports by Himanshu Gupta

The Delhi Tightrope: Analysing Putin's Visit Amidst US Trade Pressures

December 4, 2025 – New Delhi has once again become the fulcrum of a high-stakes geopolitical balancing act. The conclusion of Russian President Vladimir Putin's state visit has been marked by affirmations of a 'special and privileged strategic partnership,' complete with new agreements in energy and defence. Simultaneously, however, the corridors of Udyog Bhawan and the boardrooms of India's top export houses are buzzing with anxiety over a deepening trade standoff with Washington.

For the Indian import-export community, this is not a theoretical foreign policy debate. It is a live-fire exercise in risk management, with punitive US tariffs directly impacting balance sheets and the promise of Russian trade offering both opportunity and peril. As a trade analyst, my role is to cut through the diplomatic rhetoric and provide a clear-eyed assessment of the commercial realities now facing Indian businesses. The core question is no longer *if* India can walk the tightrope between Moscow and Washington, but *how* its businesses can navigate the treacherous winds now blowing from both sides.

A Summary of the Geopolitical Chessboard

Based on the events of the past week, the situation can be distilled into two parallel, and conflicting, narratives. On one hand, President Putin's visit was a clear success from a bilateral perspective. Discussions reportedly finalised long-term contracts for LNG supply, expanded cooperation in civil nuclear energy, and moved forward on the joint production of next-generation military hardware. Critically, there was significant emphasis on de-dollarizing trade through enhanced Rupee-Rouble mechanisms and linking India's UPI with Russia's Faster Payments System (SPFS). This is Moscow’s direct response to Western sanctions, and New Delhi's participation, however pragmatic, has not gone unnoticed.

On the other hand, the much-anticipated trade deal with the United States remains stalled. The recent CNN report correctly highlights the core issue: Washington has leveraged trade as a tool of political pressure. The 50% tariffs mentioned are not a broad-based measure but a targeted strike against specific Indian sectors—reportedly steel, aluminium, and certain categories of textiles and automotive components. According to sources in Washington, approximately half of this tariff action is a direct 'punishment' for India's continued high-value energy and defence trade with Russia, which the US views as undermining the global sanctions regime. This move effectively holds the larger, more comprehensive trade agreement hostage, forcing New Delhi into a difficult position.

Implications for the Indian Import-Export Sector

For our readers—the importers, exporters, logistics providers, and trade financiers who form the backbone of India's commercial engagement with the world—these high-level manoeuvres translate into immediate operational challenges and strategic imperatives. Here is a breakdown of the key implications:

• Immediate Margin Erosion and Market Diversification: Exporters in the steel, textile, and auto component sectors face an existential threat in the US market. The 50% tariff makes their products uncompetitive overnight. The immediate priority must be aggressive market diversification. Businesses should be re-evaluating sales strategies to focus on the EU, Middle East (especially the UAE and Saudi Arabia), ASEAN, and Latin America. Government export promotion councils must act swiftly to facilitate this pivot.
• Payment Gateway and Compliance Minefield: The push for Rupee-Rouble trade, while strategically sound for India-Russia business, creates a massive compliance headache. Indian banks facilitating these transactions risk scrutiny and potential secondary sanctions from the US Treasury. Exporters and importers dealing with Russia must conduct extreme due diligence and prepare for payment delays and heightened scrutiny from their own financial institutions, who will be understandably risk-averse.
• Supply Chain Volatility for Importers: Indian manufacturers who rely on American or European high-tech components (e.g., semiconductors, specialised industrial machinery) may face new hurdles if their final products are destined for projects linked to Russian entities. Conversely, importers of defence and energy equipment from Russia may secure favourable terms but must contend with immense logistical and insurance challenges, as global shipping and insurance firms remain wary of sanctions. A re-evaluation of supply chain dependencies is no longer a choice but a necessity.
• Opportunity in the Russian Corridor: It is not all doom and gloom. For every Western company that has exited Russia, an opportunity has been created. Indian pharmaceuticals, agricultural products (tea, rice, fruits), automotive parts, and consumer goods now have a less-crowded market to enter. The International North-South Transport Corridor (INSTC) is becoming more viable, potentially reducing transit times to Russia. Businesses willing to navigate the complexities could find significant growth, but this path is reserved for those with a high-risk appetite and specialised expertise.
• Increased Cost of Capital and Insurance: The heightened geopolitical risk associated with India will likely translate into higher costs for trade finance and insurance. Lenders and insurers will price in the uncertainty of potential new sanctions or retaliatory tariffs, making letters of credit (LCs) more expensive and cargo insurance premiums rise, particularly for shipments traversing sensitive routes.

Conclusion: A New Era of Strategic Agility

The events surrounding President Putin's visit have crystallised a new reality for Indian trade. The era of benefiting from all sides without friction is drawing to a close. The nation's pursuit of 'strategic autonomy' now has a direct cost, and it is the business community that will be asked to pay the initial price through tariffs and heightened operational risk.

This is a moment that demands more than resilience; it demands proactive, strategic agility. Indian importers and exporters must become geopolitical analysts in their own right, building redundancy into their supply chains, diversifying their customer base, and investing heavily in compliance and risk-management frameworks. The government can provide support, but the onus of navigating this complex, multipolar world now falls squarely on the shoulders of Indian enterprise. Success in the coming years will not just be defined by the quality of our products, but by the sophistication of our response to global power dynamics.

Source: Original