India can ease Trump tariff risks by importing more US oil: Alchemy’s Hiren Ved

"India’s actions have been conciliatory, not reactionary," Ved said. "This is the kind of mature statecraft that gives India an edge. We’re not picking fights—we’re finding solutions."

As the United States sharpens its focus on reciprocal trade under US President Donald Trump's second term in charge, India must prepare to defend its economic interests. One way to do that, says Hiren Ved, Director and CIO of Alchemy Capital Management, is by narrowing its $36 billion trade surplus with the US—strategically and amicably.

"There are two significant levers India can pull," Ved said. "One is importing defence equipment. The other, more immediate one, is oil."

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Ved pointed to recent data to make his case. In 2024, India imported 232 million tonnes of crude oil. Of this, 38 percent came from Russia—an enormous jump from just 2 percent in 2022. The reason? Post-Ukraine war sanctions on Moscow created an opportunity for India to buy discounted Russian crude.

However, this shift came at the cost of other suppliers. The US, which once accounted for 9 percent of India’s oil imports, saw its share shrink to just 4 percent in the first nine months of FY25. It had dipped to 3 percent in 2024.

"If India were to restore US oil’s share to 9 percent, that alone could add $7.6 billion in imports, assuming a price of $70 per barrel," Ved estimated. "That’s enough to reduce a quarter of the trade surplus."

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He acknowledged this would mean trimming imports from countries like Russia or those in the Middle East. "But oil is one area where India has flexibility—and where buying more from the US can have real diplomatic payoff," he said.

Beyond oil, Ved believes India has taken a far more "mature and measured" approach in its trade diplomacy with the US. Unlike other countries that have retaliated against Washington’s protectionist posturing, India has chosen engagement over escalation.

"India never went down the road of confrontation. No reciprocal tariffs, no public criticism," Ved said. Instead, India has been "way ahead" in negotiating a possible trade deal with the US—perhaps as early as June, some reports claimed.

In recent months, India has proactively slashed tariffs on goods popular with US exporters. Duties on high-end motorcycles have been cut from 50 percent to as low as 30 percent. Bourbon whiskey duties have been lowered from 150 percent to 100 percent. Telecom equipment now faces just 10 percent duty, down from 20 percent.

"India’s actions have been conciliatory, not reactionary," Ved said. "This is the kind of mature statecraft that gives India an edge. We’re not picking fights—we’re finding solutions."

On April 9, US President Donald Trump announced a 90-day pause on reciprocal tariffs for most countries—excluding China—while retaining a 10 percent baseline tariff across the board. For India, which has been the only nation in active trade negotiations with the US since the start of the Trump administration, the move comes as a partial relief. The 26 percent reciprocal tariff that was to apply to Indian goods now stands temporarily suspended. However, the 10 percent baseline tariff, implemented globally from April 5, will continue to apply.