Will ‘substantially' raise tariffs on India for profiting from Russian oil, says Donald Trump

Indian Express

2 days ago

India Russian oil trade 2025: US President Donald Trump again hit out at India over the latter's substantial imports of Russian crude oil, and threatened that he will 'substantially' raise tariffs on New Delhi for profiting from exporting fuels derived from Russian oil. Trump's latest attack came just days after he announced 25 per cent tariffs and an unspecified 'penalty' on India for its defence and energy imports from Russia.
'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. 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,' Trump posted on his social media platform Truth Social.
Trump's July 31 announcement of 25 per cent tariff and the unspecified penalty has rattled Indian exporters, especially of low-margin products such as apparel and footwear, who have expressed fears of job losses due to increased tariffs. In his post on Monday, however, he did not make any mention of the 'penalty'. The tariff rate Trump announced for India is higher than US tariffs announced for competing countries such as Bangladesh, Vietnam, and several ASEAN nations
New Delhi and Washington are yet to reach a trade deal, with differences over market access for American agricultural products among the key roadblocks. India's Russian oil imports, which form a bulk of Near Delhi's total crude oil imports, have also emerged as an irritant in the India-US relationship amid Trump's growing frustration with Russia over the war in Ukraine.
This renewed pressure from the US and other Western powers—forcing Russia's top trade partners to cut down on imports from the country—are aimed at forcing the Kremlin's hand into ending the Ukraine war. For Trump, who wants the three-year-old Russia-Ukraine war to end within days, this is an opportune time to pressurise countries like India and China over their Russian imports, given the sensitive trade negotiations that these countries are holding with the US.
While the US has raised pressure on India, exporters said that China has begun aggressively cutting prices to retain access to the US market and outcompete Indian goods, even as it continues to face 30 per cent tariffs. China faces an August 12 deadline to reach a durable tariff agreement with the US.
'China — not India — is the largest buyer of Russian oil. In 2024, China imported $62.6 billion worth of Russian oil, compared to India's $52.7 billion. But Mr Trump appears unwilling to criticise China, perhaps because of geopolitical calculations, and instead targets India unfairly,' think tank GTRI said.
India—the world's third-largest consumer of crude oil with an import dependency level of over 85 per cent—continues to maintain that its oil purchases are commercial decisions, it being targeted by the US and Europe over these purchases is unjustified and unreasonable.
Amid increasing pressure on India from the US and other Western powers over the past couple of months, Indian refiners—led by public sector players—began cutting down on Russian oil imports, much before Trump's announcement the unspecified tariff 'penalty' on New Delhi. Latest vessel tracking data shows that July deliveries of Russian crude—which would have been contracted May or early June—to Indian refiners fell significantly. Industry and trade sources also indicated that Indian public sector refiners have, for the time being, halted future contracting of Russian oil, the mainstay of India's oil imports for the better part of the past three years.
India's Russian oil imports in July were at 1.6 million barrels per day (bpd), down 24 per cent from June levels, and 23.5 per cent from volumes delivered in July of last year, according to latest tanker data from global real-time data and analytics provider Kpler. The share of Russian crude in India's oil import basket in July contracted notably to around 33.8 per cent from June's 44.5 per cent.
Industry insiders, experts, and trade sources indicate that renewed pressure and threats from the US and Europe over the past few weeks have cast a shadow on India's Russian oil imports, and could mark the beginning of Indian refiners pivoting away from Moscow's oil. So far, India had successfully managed to walk 'the fine line between energy security and geopolitical pressure', but its options now appeared limited, one expert said, adding that Indian refiners 'must now plan not just for commercial shifts, but for systemic geopolitical realignment'.
Deliberations are on between the government and other stakeholders—primarily refiners—on managing the situation and assessing the choices on the table for India, sources said. With a pre-emptive reduction in Russian oil imports, some bit of signaling has already taken place. The next steps would most likely be decided on how the India-US dynamic evolves, and more importantly, whether or not Trump decides to further harden the American stance and rhetoric against Russia. Any breakthrough between the White House and Kremlin over the Russia-Ukraine war would most likely ease the pressure on buyers of Russian crude.
Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
Sukalp Sharma is a Senior Assistant Editor with The Indian Express and writes on a host of subjects and sectors, notably energy and aviation. He has over 13 years of experience in journalism with a body of work spanning areas like politics, development, equity markets, corporates, trade, and economic policy. He considers himself an above-average photographer, which goes well with his love for travel. ... Read More