Trump threatens to 'substantially' raise tariffs on India over Russian oil

Trump says New Delhi buying 'massive' amounts of Russian crude and selling it for big profits

US President Donald Trump on Monday stepped up pressure on New Delhi, threatening to “substantially” raise tariffs on inbound shipments from India over the purchase of a “massive” amount of Russian crude oil.

 

The development came days after Trump announced a sweeping 25 per cent import tariff on Indian goods and an unspecified penalty for Russian energy purchases. Trump, however, is yet to specify the quantum of the tariff.

 

“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 US,” he wrote on Truth Social. 

 

 

India imports a third of its total crude from Russia, making the country New Delhi’s largest crude supplier. India is also the second-largest buyer of Russian crude, after China. India imported about 1.75 million barrels per day of Russian oil from January to June this year, up 1 per cent from a year ago, according to news agency Reuters.

 

During FY25, exports of petroleum products from India fell by a fourth to $62.5 billion, government data showed. 

 

Ajay Srivastava, former trade ministry official and founder of Delhi-based think tank GTRI, said Trump’s claim was factually incorrect and misleading. “First, India does not export crude oil—Russian or otherwise. India is a net importer of crude oil, and its global exports of crude stand at zero. What India does export are refined petroleum products including from Russian oil, such as diesel and jet fuel, after processing crude oil in its refineries—just like many other energy-importing countries. Second, China—not India—is the largest buyer of Russian oil,” he said. 

 

“Third, 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 stabilize global oil markets after Western sanctions disrupted traditional supply chains. By maintaining diversified and affordable energy access, India contributed to preventing a global oil price shock,” he added.

 

The US has repeatedly accused India of financing Russia’s war in Ukraine by buying crude from Moscow. In the past, Trump had threatened 100 per cent tariffs on US imports from countries that buy crude from Russia unless Ukraine and Moscow reach a peace deal.

 

India, on the other hand, has been buying discounted Russian crude for over three years and has defended its decision, saying it has been trying to get the best deal for the country to manage high energy prices. Besides, it has helped avoid a global surge in oil prices, which have remained subdued despite Western curbs on the Russian oil sector.

 

Last week, Indian government sources said that New Delhi would keep purchasing oil from Russia and that there would be no immediate changes, despite Trump’s threats of penalties. “These are long-term oil contracts. It is not so simple to just stop buying overnight,” they said, justifying India’s oil purchases from Russia.

 

On Friday, Foreign Ministry spokesperson Randhir Jaiswal said India has a “steady and time-tested partnership” with Russia. “On our energy sourcing requirements... we look at what is available in the markets, what is there on offer, and also what is the prevailing global situation or circumstances,” he said.

 

Statement by MEA spokesperson after Trump threatens tariff hikes over Russian crude

 

India has been targeted by the United States (US) and the European Union (EU) for importing oil from Russia after the commencement of the Ukraine conflict. In fact, India began importing from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict.

The US at that time actively encouraged such imports by India for strengthening global energy market stability.

 

India’s imports are meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by the 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 EU in 2024 had a bilateral trade of euro 67.5 billion in goods with Russia. In addition, it had trade in services estimated at euro 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.

 

Where the US is concerned, it continues to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilisers as well as chemicals.

 

In this background, targeting India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.

 

 

(With inputs from Reuters)