US president Donald Trump has imposed an additional 25 per cent tariff on Indian goods over New Delhi's continued imports of Russian oil, dramatically escalating tensions between the two nations after trade talks reached a deadlock.
The new import tax, effective 21 days after 7 August, will raise duties on some Indian exports to as high as 50 per cent, forcing the Asian country to cough up the highest levy on any US trading partner as Washington objects to Russian oil purchases by India.
India’s External Affairs ministry said the decision was “extremely unfortunate” and noted that many other countries are also importing Russian oil in their national economic interest.
The US president said on Monday that India was profiting from discounted Russian crude while disregarding the ongoing war in Ukraine.
“India is not only buying massive amounts of Russian oil, they are then, for much of the oil purchased, selling it on the open market for big profits," he wrote on his Truth Social platform. “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."
“The targeting of India is unjustified and unreasonable," spokesperson Randhir Jaiswal said. He pointed out that the US was itself still trading with Russia as was the EU. “It is revealing that the very nations criticising India are themselves indulging in trade with Russia,” he said. “Unlike our case, such trade is not even a vital national compulsion for them.”
Two Indian government sources had earlier told Reuters that India would keep buying Russian oil despite Mr Trump's threats.
The Trump administration’s criticism of India’s Russian oil purchases sharpened after it failed to reach a trade deal with Narendra Modi’s government, prompting Washington to levy a 25 per cent import tariff on Indian goods.
According to trade data shared with Reuters, India is the biggest buyer of seaborne crude from Russia, importing about 1.75 million barrels per day from January to June this year, up 1 per cent from one year ago. In total, it imported Russian oil worth about £38bn in the financial year ending March 2025.
India, the third largest oil importer and consumer in the world, depends on Russian oil for 35 per cent of its total crude needs, according to official data.
After the Russian invasion of Ukraine in 2022, India became the biggest buyer of Russian crude due to the diversion of traditional supplies to Europe, which officials in New Delhi said was a “necessity compelled by global market situation”.
In that first year, India imported as much as two million barrels a day of Russian oil, accounting for roughly 2 per cent of global supply. China and Turkey were the other major buyers.
In 2023, at the same time as India’s import of Russian crude oil more than doubled year-on-year, its export of refined crude to the EU grew to a record level.
In April this year, Kpler market data showed Indian import of Russian crude likely hitting 2.15 million barrels a day, the highest volumes since May 2023.
In all, the South Asian nation imported an average of 4.88 million barrels per day of oil in the fiscal year until March 2025, a growth of 5 per cent over the previous year. The import of Russian oil rose 7.3 per cent to 1.76 million barrels a day, raising its share marginally to 36 per cent while the share of the Organisation of Petroleum Exporting Countries slipped slightly to 48.5 per cent.
In March this year, the US was the fourth largest oil supplier to India after Russia, Iraq and Saudi Arabia.
Analysts said the unpredictability of the Trump administration had created a major challenge for New Delhi in managing longstanding relations with Moscow.
"India's continued energy and defence purchases from Russia presents a larger challenge, where India does not feel it can predict how the Trump administration will approach Russia from month to month," said Richard Rossow, head of the India program at Washington's Center for Strategic and International Studies.
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