Categories
Donald Trump warns of “massive” tariffs on India over continued Russian oil imports, claims he spoke to PM Modi and suggested action: “He’s not going to be doing that much longer…”
In a bold escalation of trade and geopolitical pressure, U.S. President Donald Trump said Sunday that India will continue to face “massive” tariffs unless it halts imports of Russian oil — a move he says Indian Prime Minister Narendra Modi personally pledged during a phone call. Trump declared, “I spoke with Prime Minister Modi … and he said he’s not going to be doing the Russian oil thing.” India, however, has denied any such direct commitment, and the dispute signals intensifying friction between two for‑mer allies navigating diverging strategic imperatives.
This article takes an in‑depth look at the background, stakes, and possible outcomes of this latest chapter in U.S.–India relations.
Background: Why this matters
U.S. rationale for targeting India’s oil imports from Russia
The crux of the U.S. objection lies in its contention that India’s growing purchases of oil from Russia indirectly bolster Moscow’s ability to finance its war in Ukraine. Washington argues that by buying discounted Russian crude — which is increasingly shunned by Western buyers due to sanctions — India is undermining the effectiveness of those sanctions.
As early as August 2025, Trump’s administration imposed an additional 25 % tariff on Indian goods, summing to a total of 50 % tariffs on many exports when combined with earlier measures. The White House described India’s trade and energy ties with Russia as constituting an “unusual and extraordinary threat” to U.S. national security and foreign policy.
India’s perspective: energy security and strategic autonomy
From New Delhi’s perspective, the issue is more complex. India confronts the twin imperatives of securing affordable energy for a large and growing population and preserving its strategic autonomy — especially in a global environment where it balances relations with the U.S., Russia, and China. The Indian government has repeatedly emphasised that its energy imports are made “based on market factors” and in service of its 1.4 billion people.
India’s oil imports from Russia have surged since the Ukraine war began, aided by deep discounts offered by Moscow after Western sanctions. According to one analysis, India imported about 1.9 million barrels per day of Russian‑origin crude in 2025, making it the biggest single buyer in the world of discounted seaborne Russian oil.
The Trump‑Modi conversation claim
Trump claims he directly spoke to Prime Minister Modi, who assured him India would stop buying Russian oil. “I spoke with Prime Minister Modi of India, and he said he’s not going to be doing the Russian oil thing,” Trump told reporters aboard Air Force One.
However, the Indian government says it is not aware of any such conversation. India’s foreign ministry said that it “has already made clear our position on these issues … our imports are based on market factors.”
This disconnect hints at deeper underlying issues of miscommunication, diplomatic theater, or strategic signalling.
The mechanics of the tariffs and what’s at stake
How big are the tariffs?
- In August 2025, Trump signed an executive order adding 25 % tariffs on Indian goods, citing India’s imports of Russian oil. This brought many Indian exports to the U.S. under a combined tariff of 50 %.
- The U.S. administration indicated that if India does not change course, tariffs could remain or be further ramped up, effectively tying India’s energy strategy to trade concessions.
What is at risk for India?
- India exports tens of billions of dollars’ worth of goods to the U.S.; according to one source, exports to the U.S. were more than US$87 billion in 2024.
- Industries vulnerable to high tariffs include textiles, jewellery, leather, marine, gems & jewellery, and labour‑intensive sectors. Analysts say the increased duties are “a strategic shock” for these export‑driven segments.
- The tariffs also introduce uncertainty into investment decisions and supply‑chain planning: if access to the U.S. market is compromised, Indian manufacturers and exporters may need to reorient business models.
What is at risk for the U.S. and geopolitics?
- For the U.S., the tariffs are part of a broader approach to use economic leverage to isolate Russia and limit its ability to finance the war in Ukraine. By targeting countries that continue to buy Russian oil, the U.S. aims to tighten the global straitjacket on Moscow.
- But this approach also risks alienating India — a major strategic partner for Washington in Asia, particularly as the U.S. seeks to build alliances and counterbalance China. The tariffs could strain military, trade and diplomatic cooperation.
- Moreover, if India shifts away from Russia under pressure, global oil flows may become more opaque, channelled through “shadow markets” via ship‑to‑ship transfers, complicating sanctions enforcement.
Key reactions and responses
Indian government
India’s foreign ministry has strongly rejected the U.S. framing of the issue. It described the additional tariffs as “unfair, unjustified and unreasonable,” emphasising India’s right to make sovereign decisions about energy supply.
India’s top export sectors view the tariffs with concern but are also mindful that the country’s “growth fundamentals remain very strong,” as noted by India’s central bank governor.
U.S. administration
Within the U.S. administration, trade adviser Peter Navarro has been particularly vocal, characterising India’s Russian oil purchases as “using our dollars to buy Russian oil” and indirectly supporting the war machine in Ukraine.
The U.S. has also indicated it may impose secondary sanctions or expand the list of countries subject to high tariffs if they too buy Russian energy.
Russia
Russia has made clear it expects its energy partnership with India to continue despite Western pressure. Russian officials have expressed confidence in ongoing cooperation with New Delhi.
What are the possible scenarios ahead?
Scenario 1: India capitulates/unilateral cut in Russian oil
If India accedes to U.S. pressure and starts significantly reducing its Russian oil imports, the tariffs might be relaxed as part of a larger trade deal. This would ease U.S.–India tension and bring India more into alignment with Western sanctions policy.
However, for India, the costs of rapid disengagement from Russian oil are substantial: energy disruption, higher prices, and potential loss of favourable contracts.
Scenario 2: India maintains course, tariffs remain or deepen
If India decides to continue purchasing Russian oil, viewing it as essential for its energy security and refusing to be dictated to, then tariffs are likely to remain in place. India might also retaliate in some form or seek alternate markets for its exports.
This could degrade the bilateral relationship with the U.S., slow down trade talks or cooperation in defence. It might also push India closer to Russia or other partners in the BRICS bloc.
Scenario 3: Negotiated compromise
A more nuanced outcome is a negotiated agreement where India agrees to a phased reduction in Russian oil imports in exchange for phased tariff relief and deeper U.S.‑India cooperation in other areas (technology, defence, supply‑chain diversification).
There may also be side‑deals where India secures alternate energy supplies (from the U.S., Middle East, Gulf) while maintaining some Russian imports temporarily. Indeed, India is exploring increasing U.S. oil and gas imports under pressure from Washington.
Effects on broader trade and geopolitics
Supply chain & export‑oriented industries in India
Exporters in India must now contend with higher tariffs in their largest overseas market. Sectors such as textiles, gems & jewellery, leather and marine exports could face margin compression or loss of competitiveness. Industries may consider shifting production to other markets or reconfiguring their strategy.
Energy security and global oil flows
The U.S. pressure on India forces attention to the broader global energy architecture: how discount Russian oil is influencing importers, how sanctions are being circumvented, how ship‑to‑ship transfers create opaque supply networks. India’s decision hinges on finding affordable energy while managing geopolitical risk.
U.S.–India strategic relationship
The U.S. sees India as a key partner in the Indo‑Pacific, in managing China’s rise, defence cooperation and emerging technology frameworks. But trade friction – especially a dramatic move like 50 % tariffs – creates a strain. Trust, predictability and alignment become more complex.
Russia’s global strategy
Russia stands to lose one of its top buyers if India reduces its imports. But Russia also appears confident that India will continue cooperation. Should India pivot away, Russia may deepen ties with China or other buyers, and explore alternative shipping routes — resulting in more opaque flows. The development could thus reduce the impact of sanctions rather than enhance them.
What this means for India’s economy
Despite the headwinds, India remains optimistic. The Indian central bank governor has asserted that growth fundamentals are “very strong” and that the tariff threat is “not a matter of huge concern” for the economy in a broader sense.
Still, there are real risks:
- Export‑oriented SMEs might bear the brunt of lost access or increased cost of access to U.S. markets.
- The cost of energy could rise, particularly if imports from Russia are cut without secured alternatives at equivalent price.
- Trade uncertainty could discourage foreign investment or complicate supply‑chain commitments.
On the flip side, India might accelerate its diversification of energy sources — including increased imports from the U.S. and Middle East. India’s trade talks with the U.S. already include energy cooperation.
Key quotes worth noting
- Trump: “If they want to say that [no conversation occurred], then they’ll just continue to pay massive tariffs.”
- Indian official (MEA): “Our imports are based on market factors … we will take all necessary measures to safeguard our national interests and economic security.”
- Peter Navarro (U.S. trade adviser): “Using our dollars to buy Russian oil … India is indirectly supporting the war machine.”
Why the timing now?
Several factors converge:
- The Russia‑Ukraine war remains unresolved, and the U.S. is increasingly frustrated by countries that appear to bypass sanctions.
- India’s imports of discounted Russian oil have surged, making it a prime target for U.S. pressure.
- U.S.–India trade talks were in progress, and some analysts suggest that the tariff pressure is being used as leverage to advance a broader bilateral deal on trade, energy, defence and tech.
- India’s strategic posture is shifting, balancing relationships between the U.S., Russia and China, and this tariff threat is a stress‑test for how India manages that balance.
Implications and possible ripple‑effects
For global trade architecture
This episode underscores how trade policy is being used as a geopolitical tool rather than only economics. Tariffs are no longer just about trade imbalances but also about aligning countries with strategic objectives (in this case, isolation of Russia).
For other countries
Other U.S. trading partners that import Russian energy may watch closely. The U.S. has already considered “secondary sanctions” or additional tariffs on countries seen as enabling Russia. Business Standard This raises the question: will more countries be targeted? Will India be the first of many?
For energy markets
If India reduces Russian oil imports, global oil flows may shift: Russia may seek alternative buyers or discount deeper; India may pay more for non‑Russian oil; energy pricing, refinery economics, and trade flows may shift accordingly.
For India‑U.S. future cooperation
While trade tensions may rise, cooperation in other domains (defence, 5G/semiconductors, supply‑chain diversification) may continue, but overshadowed by trust issues. The U.S. may ask India for more alignment; India may push back citing sovereign interest.
What to watch for next
- India’s announcement or policy shift on Russian oil imports — Will New Delhi commit to specific reduction targets? Will it signal a phased withdrawal?
- U.S. response and tariff policy — Will the U.S. maintain the 50 % tariff indefinitely? Will it relax if India takes action? Will it impose further tariffs?
- Trade negotiation outcomes — Are there ongoing U.S.–India bilateral talks that yield a compromise? Are energy/defence deals part of the package?
- Export industry signals from India — Are Indian exporters redirecting supply chains away from U.S. dependence or highlighting losses due to tariffs?
- Russia‑India energy deals — Will Moscow offer further discounts, alternate payment mechanisms (e.g., via rupee/₹), or create new pipelines to cement the energy link despite U.S. pressure?
- Global oil flow shifts — Will other buyers emerge? Will intermediate/ship‑to‑ship trade of Russian oil increase? Will transparency decrease?
Conclusion
The ultimatum from President Trump to India — stop buying Russian oil or continue paying “massive” tariffs — is much more than a trade spat. It is a convergence of energy security, geopolitical alignment, economic leverage and strategic autonomy. For India, the balancing act is acute: it must secure affordable energy for its huge population while retaining the freedom to follow its own foreign‑policy compass. For the U.S., the move is part of its broader effort to isolate Russia and signal that trade partners must align with Western sanctions.
The next few months will tell whether India chooses accommodation, resistance or compromise. Regardless of the path, this moment marks a significant shift in the U.S.–India relationship — from trade partner to regulated geopolitical actor — and signals how trade policy is increasingly being wielded as a tool of global strategy.
Also Read : Delhi says Happy Diwali with toxic air, curbs imposed as areas slip into red zone
