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Trump pledges to raise tariffs on India over Russian oil. Why this may not deter New Delhi
A Russian crude oil tanker transits the Bosphorus in Istanbul. Trump has threatened to raise tariffs on India over its purchase of Russian oil. File image/Reuters
To buy or not to buy… That's the question India is having to ask after US President Donald Trump has stepped up his attacks against the country for its purchase of oil from the Vladimir Putin-led nation.
On Monday, the US leader threatened to 'substantially' raise tariffs on goods from India over its purchase of Russian oil. This came after Trump has already announced a 25 per cent tariff on New Delhi along with a 'penalty' for buying Russian crude.
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Since last week, Trump has taken aim at India along with his officials, including Secretary of State Marco Rubio and White House Deputy Chief of Staff Stephen Miller, questioning India's purchase of Russian oil.
However, the question is — will Prime Minister Modi acquiesce to Trump's demands and stop buying Russian oil? The answer: it seems quite unlikely, and here's why.
Trump's threats to India on Russian oil
The current tension between India and the US stems from when Donald Trump first announced that he would slap tariffs of up to 100 per cent on countries that buy Russian oil unless Moscow reaches a peace deal with Ukraine by August 7-9.
Then last week, Trump announced 25 per cent tariffs on Indian goods, citing New Delhi's levies on US products and purchases of Russian oil and military equipment. While India was 'our friend', it had always bought most of its military equipment from Russia and was 'Russia's largest buyer of energy, along with China, at a time when everyone wants Russia to stop the killing in Ukraine — all things not good'! Trump posted on his Truth Social platform on July 30.
This was followed up by US Secretary of State Marco Rubio stating that the purchase of Russian crude was a 'point of irritation' in US-Indo ties, telling Fox News that while India was an 'ally' and 'strategic partner', Delhi's purchase of Russian oil was hampering its relationship with Washington.
US President Donald Trump and some of his officials from the administration have been pressuring India to forego its oil trade with Russia in the past one week. File image/Reuters
Then on Sunday (August 3), Trump's top aide accused India of financing Russia's war in Ukraine by buying oil from Moscow. 'What he (Trump) said very clearly is that it is not acceptable for India to continue financing this war by purchasing the oil from Russia,' said Stephen Miller, deputy chief of staff at the White House and one of Trump's most influential aides, in an interview with Fox News, adding, 'People will be shocked to learn that India is basically tied with China in purchasing Russian oil. That's an astonishing fact.'
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And Trump himself doubled down on the pressure on Monday (August 4) with a fresh post on Truth Social, in which he accused India of buying 'massive amounts' of oil from Russia and then 'selling it on the open market for big profits.'
'They don't care how many people in Ukraine are being killed by the Russian war machine. Because of this, I will be substantially raising the tariff paid by India to the USA,' he said.
India's purchase of Russian oil
The strain in India-US ties has also to do with oil, namely Russian oil. Earlier, India purchased most of its oil from West Asia, but this changed after Russia began selling its oil at discounted rates after the West shunned it as punishment for its full-scale invasion of Ukraine in February 2022.
In fact, an US Energy Information Administration report reveals that India increased its purchases of Russian oil more than sixfold after the conflict broke out. Moreover, the International Energy Agency notes that 70 per cent of Russian crude was exported to India in 2024.
Compiling data, Bloomberg reports that India, on an average, has been buying Russian crude at about 1.7 million barrels a day so far this year.
Bloomberg reports that India, on an average, has been buying Russian crude at about 1.7 million barrels a day so far this year. Representational image/Reuters
India's stance on Russian oil
On Monday (August 4), a little after Trump threatened additional tariffs on India, India responded to the situation, indicating that it wouldn't stop purchasing crude and even stated that 'the targeting of India is unjustified and unreasonable'.
Ministry of External Affairs spokesperson Randhir Jaiswal in a statement said that India has 'been targeted by the United States and the European Union for importing oil from Russia after the commencement of the Ukraine conflict'.
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He called out the US and Europe's double standards noting that while they criticised India, they themselves were carrying out trade with Russia. 'India's imports are meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by global market situation. However, it is revealing that the very nations criticising India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion.
'The European Union in 2024 had a bilateral trade of €67.5 billion in goods with Russia. In addition, it had trade in services estimated at €17.2 billion in 2023. This is significantly more than India's total trade with Russia that year or subsequently. European imports of LNG in 2024, in fact, reached a record 16.5 million tonnes, surpassing the last record of 15.21 million tonnes in 2022.
'Europe-Russia trade includes not just energy, but also fertilisers, mining products, chemicals, iron and steel and machinery and transport equipment.
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'Where the United States is concerned, it continues to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilisers as well as chemicals.'
He further noted that India began importing from Russia traditional supplies were diverted to Europe after the outbreak of the conflict. The United States at that time actively encouraged such imports by India for strengthening global energy markets stability.
Other officials in the Indian administration note that despite Trump's threats, India will continue its trade with Russia for a number of reasons. Representational image/Reuters
Let the Russian oil flow
Other officials in the Indian administration note that despite Trump's threats, India will continue its trade with Russia for a number of reasons.
Firstly, they noted that there was a growing sense within the administration that it shouldn't allow for American policymaking to shape its choices on vital energy supplies for its 1.4 billion people.
Analysts and officials from the government also note that if even India suspended its oil trade with Moscow it wouldn't help the US. As Pankaj Saran, a former Indian deputy national security adviser and ambassador to Moscow, told the New York Times, 'What we also have to keep in mind is that even if India may cut to zero, China is not going to. You will have a kind of a bizarre situation where Russia will sell to China at cheap prices, and so you would have China being the ultimate beneficiary.'
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Moreover, Indian experts note that it was owing to its purchase of oil that helped keep global oil prices in check. Indians kept the Russian oil flowing at the capped price, helping to shrink Russia's revenue but also ensuring that global prices would remain in check.
One source was quoted as telling the Mint, 'Had India not absorbed discounted Russian crude combined with OPEC production cuts of 5.86 mb/d, global oil prices could have surged well beyond the March 2022 peak of US$137/bbl, intensifying inflationary pressures worldwide.'
In fact, former US ambassador to India Eric Garcetti had lauded New Delhi's purchase of Russian oil in 2024. In the now widely circulated video, Garcetti is heard saying, 'They (India) bought Russian oil because we wanted somebody to buy Russian oil at a price cap. That was not a violation or anything. It was actually the design of the policy because, as a commodity, we didn't want the oil prices going up, and they fulfilled that.'
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"India brought Russian Oil, because we wanted somebody to buy Russian oil...", says US ambassador Garcetti on India buying Russian oil ; Adds,'no Price Cap violation, we did not want oil prices to go up..' pic.twitter.com/it3zku9Hbs — Sidhant Sibal (@sidhant) May 11, 2024
Experts also noted that India's contracts are long-term and 'it's not so simple to just stop buying overnight'.
Trade research body GTRI also noted, 'India's oil trade with Russia has taken place with full transparency and broad understanding with the US. One of the key reasons India stepped up Russian oil purchases was to help stabilise global oil markets after Western sanctions disrupted traditional supply chains.
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'By maintaining diversified and affordable energy access, India contributed to preventing a global oil price shock. Trump's decision to raise tariffs on India citing oil trade is not only unjustified — it ignores market realities misrepresents trade data, and undermines a key strategic partnership in the Indo-Pacific.'
India also has to consider the price of moving away from Russian oil. New Delhi would have to pay more if it went with sources of oil like Saudi Arabia, who sells at a higher price to Asian countries because of a policy called the 'Asian premium' maintained by the Organisation of the Petroleum Exporting Countries (Ospec).
We will just have to wait and watch to see what happens next — will Trump drop his demand or will India give in.
With inputs from agencies
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