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Informist, Monday, Aug. 4, 2025

 

--US Trump: India not only buying Russian oil but also selling in open mkt

--US Trump: Will substantially hike tariff on India for buying Russian oil

 

NEW DELHI – What comes as a fresh blow, US President Donald Trump Monday threatened that he would "substantially" raise tariffs on Indian goods being shipped to the US for the Asian country's continued energy procurement 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," Trump wrote in a post on Truth Social. 

 

This is Trump's third scathing remark towards India in the past seven days. While he spoke about "raising" tariffs, it is not yet clear if he would further increase the tariff he announced on Indian goods last week or the penalty that he said will be levied over and above the tariff for trading with Russia. Trump had on Wednesday announced a 25% tariff on Indian goods shipped to the US, along with an additional penalty for India's procurement of military equipment and energy from Russia. The 25% tariff is set to kick in from Aug. 7.

 

"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 US President wrote. 

 

Trump's comments point to rising tensions between the two nations over US' clear displeasure with India's energy procurement from Russia, with whom India has maintained close economic ties for several years now. While traditionally India has relied on Moscow for military equipment, New Delhi has become one of the biggest buyers of its crude oil since Russia invaded Ukraine in February 2022.

 

India has been buying crude oil from Moscow at discounted prices amid sanctions by Western countries on Russia after it invaded Ukraine. The Group of Seven developed nations had initially imposed a $60 a barrel price cap on Russian crude and later imposed more sanctions to try to curb Moscow's oil sales. India has bought Russian oil up to $30 a bbl cheaper, though discounts have varied sharply over the past three years and have been around $4 a bbl in recent times. The International Monetary Fund in February said India saved around $7 billion per year by importing crude oil at a discounted price from Russia.

 

To be fair, India has maintained that it is not fixated on Russian oil and will import from any country that is suitable. However, moving away from Russian oil may not be enough to escape Trump's tariff threats since Washington has been pushing countries to commit to buying energy from the US as part of the trade agreements. The European Union committed to buy $750 billion of US energy products over three years as part of the trade deal with Washington.

 

India and US are currently negotiating a bilateral trade agreement, but that seems to be far from conclusion now. In an interview last week, US Treasury Secretary Scott Bessent even said the US president and his entire trade team were "frustrated" with India over stalled trade talks. Indian exporters were pinning their hopes on the trade deal to cushion them against the impact of high tariffs.

 

The 25% duty plus penalty could significantly hurt India's exports, as the US is India's top export destination with a share of nearly 20% in total outbound shipments in value terms. India exported goods worth $86.51 billion to the US in 2024-25 (Apr-Mar) and had a trade surplus of $40.82 billion, according to commerce ministry data. The reciprocal tariffs may bring India's total exports below $400 billion for the first time in four years in FY26 and pose a downside risk of at least 20 basis points to economic growth, experts have said. Added to these risks, energy procurement from Washington will also push up New Delhi's import bill. 

 

Irrespective of Trump's belligerent remarks, India's foreign ministry Friday expressed optimism that the relationship between the two countries will improve, given the fact that they have weathered many storms before. The relationship between the two nations will grow further under the proposed Bilateral Trade Agreement, External Affairs Spokesperson Randhir Jaiswal had said at a media briefing.  End

 

US$1 = INR 87.66

 

Reported by Priyasmita Dutta

Edited by Deepshikha Bhardwaj

 

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