Trump desires India to halt purchases of Russian oil. Yet, Modi resists this proposition.
India, the world's fourth largest economy, has been maintaining close partnerships with US President Donald Trump and Russia's leader Vladimir Putin, despite recent tensions. However, India's oil economy is currently facing challenges due to the US tariff threats, particularly in relation to India's significant purchases of Russian crude oil.
India imported about 88 million tonnes of Russian crude in FY25, making Russia its largest supplier. This represents approximately 36% of India's overall imports, a figure that has risen significantly from the 1.7% share in FY20. The country's reliance on Russia for crude oil is crucial in supporting its booming economy and growing population.
Despite the US tariff threats, India has continued importing large volumes of Russian crude in 2025. This decision has been met with diplomatic friction, as President Trump announced a minimum 25% tariff on goods coming from India last week. India's oil economy operates with limited space due to these US actions, according to Indian officials.
The US policy move and tariff threat are aimed at countries buying Russian oil, citing national-security and trade grounds. India, however, has publicly called these actions "unjustified and unreasonable" and has vowed to protect its national interests. Indian officials and industry sources have signaled they will continue to buy Russian crude under existing contracts and commercial imperatives.
Analyses warn that cutting off Russian crude quickly would raise India's fuel import bill materially. If India switches to importing oil from somewhere else at a higher cost, American consumers may feel the hit as well. This economic stakes and potential costs to India help explain why it has not complied with a US demand to halt Russian purchases.
The tariff threat increases short-term tension and creates uncertainty for bilateral trade talks and cooperation. However, practical economic interdependence (energy needs, defense and tech ties) limits how far India is likely to move under US pressure. Commentators and some Indian officials have noted that the US move targets India while the US continues to import from Russia for certain inputs, complicating the political messaging.
It's important to note that the figures presented in this article come from Indian press reporting and trade-flow data through mid-2025. Ongoing monthly flows can shift quickly, so near-term volumes may vary. The new tariff rate is not yet clear.
India argues that its purchases from Russia have kept global oil prices lower. The country was one of Iran's biggest clients, buying up to 480,000 barrels per day of oil before halting purchases due to US sanctions and threats of tariffs. India remains the top recipient of Russian arms, according to SIPRI.
In 2023, India exported $86.28 billion in refined oil products, making it the world's second-biggest exporter of petroleum products. This economic strength, however, does not seem to have deterred the US from the tariff threat.
The situation between India and the US is a complex one, with economic and political factors at play. As the situation develops, it will be interesting to see how both countries navigate these challenges and maintain their relationships.
- India's significant partnerships with US President Donald Trump and Russia's leader Vladimir Putin, despite recent tensions, are crucial in managing its political landscape.
- The energy sector, specifically India's oil industry, faces challenges due to US tariff threats, particularly in relation to India's large purchases of Russian crude oil.
- The financial implication of the US tariff threat on India's oil economy is substantial, as a sudden cut-off of Russian crude could materially increase India's fuel import bill.
- In the realm of politics and general news, the US tariff threat towards India has been met with strong opposition from Indian officials who view it as unjustified and unreasonable.
- The sports world, including football (soccer) and American football (NFL), might seem unrelated, but sports-betting industries could be impacted by geopolitical dynamics, such as the US tariff threat towards India.
- Industry experts suggest that India's continued purchases of Russian crude oil under existing contracts are influenced by commercial imperatives, despite the US tariff threat and diplomatic friction.
- In response to the US tariff threat, India has highlighted its role in keeping global oil prices lower by being a significant buyer of Russian crude oil and one of Iran's biggest clients before halting purchases due to US sanctions.
- Crime and justice systems in both countries may experience pressure from the escalating tensions between India and the US, as diplomatic and economic relations can have ripple effects on all aspects of society.
- As the situation between India and the US unfolds, policy and legislation discussions will likely address the tariff threat and its impact on bilateral trade, energy needs, defense and tech ties, and overall economic stability.
