India has firmly stated it will continue purchasing Russian oil despite the United States imposing heavy tariffs on Indian imports as a punitive measure. The tariffs, which cumulatively reach a staggering 50% on some Indian goods, are part of the Trump administration's strategy to pressure India to reduce its oil trade with Russia amidst ongoing sanctions linked to Russia’s invasion of Ukraine.
Finance Minister Nirmala Sitharaman defended India’s energy policy, emphasizing the country’s sovereign right to secure affordable energy supplies for its population. She said,
"India will continue to buy Russian oil because it is necessary for our energy security and economic growth. The decisions we take are in the best interest of our people, and we will not bow down to external pressure."
Context Behind US Tariffs on India
The Trump administration escalated tariffs on Indian exports in August 2025 specifically in response to India’s continued importation of Russian crude oil. Initially, a 25% tariff was introduced, which was followed by an additional 25% ad valorem duty, effectively doubling the trade penalty on certain goods from India. These tariffs come on top of existing trade frictions and have complicated relations between the world’s two largest democracies.
An official Executive Order framed the tariffs as reinforcing U.S. economic interests during the national emergency in response to Russia’s military actions in Ukraine. President Trump declared that India’s procurement of discounted Russian oil circumvents broader efforts to isolate Russia economically.
U.S. Treasury Secretary Scott Bessent remarked on CNBC,
"India’s ongoing purchases of Russian oil have benefited some of the wealthiest families in the country and undermine our collective pressure on Moscow."
This statement underscored Washington’s rationale for using trade as leverage for geopolitical aims.
India’s Historical and Economic Imperatives
India’s longstanding strategic alliance with Russia is deeply rooted in Cold War diplomacy and military cooperation, with Russia serving as a critical defense supplier. Economically, the surge in Russian oil imports since the Ukraine war began reflects New Delhi’s urgent need for affordable energy amid global supply disruptions.
Before the war, India imported about 3% of its crude oil from Russia; however, this share jumped to approximately 50% in 2025, as noted by data tracking oil flows. Major Indian refiners such as Reliance Industries, led by Asia’s richest individual Mukesh Ambani, have leveraged discounted Russian crude to feed massive refining capacities and serve domestic consumption, as well as export markets.
Despite slowing imports following tariff imposition, Indian sources have indicated the discounted price offered by Russia remains a major incentive. A senior official at Bharat Petroleum explained that recent reductions in discounts have led to slight import decreases but pledged continued engagement based on economic merit.
Impact on US-India Trade Relations
The tariffs have significantly strained US-India trade negotiations, with American officials conveying that curbing Russian oil imports is a key precondition for reducing tariff rates and advancing a broader bilateral trade deal. However, Indian trade representatives insist that sanctions impinge on national sovereignty and energy independence.
Commerce Minister Piyush Goyal asserted,
"We are focused on building new markets and strengthening global partnerships rather than succumbing to punitive tariffs. Our priority remains affordable energy and sustainable growth."
This stance reflects India’s broader diplomatic balancing act between engaging with Western allies and maintaining longstanding ties with Russia.
While the United States exempts itself from similar restrictions—continuing imports of Russian uranium, palladium, and fertilizers—India views the sanctions as inconsistent and driven by geopolitical interests rather than market considerations.
Economic Realities Behind India’s Oil Strategy
Energy security concerns remain paramount, as India’s population of 1.4 billion relies heavily on affordable fuel to drive economic development. The spike in global oil prices since 2022 has pressured Indian industry and consumers, motivating New Delhi’s pragmatic approach to oil sourcing.
Analysts note that around 60% of India's Russian oil imports flow through long-term contracts, binding the country to these supplies for extended periods despite diplomatic pressures. Adjustments in import levels thus reflect complex commercial arrangements rather than purely political decisions.
Furthermore, the U.S. itself imports refined petroleum products from India, much of which originates from Russian crude sourced at Indian refineries, highlighting the interconnected nature of global energy markets.
Regional and Global Geopolitical Implications
India’s steadfast acceptance of Russian oil amid the Ukraine conflict has placed it at odds with the United States and several Western allies seeking to maximize sanctions on Moscow. This divergence demonstrates India’s increasing strategic autonomy and desire to balance relations with multiple power centers.
While India has begun diversifying energy sources, such moves are gradual and cautious, constrained by fiscal realities and long-term contracts. The tension exemplifies broader challenges for emerging economies navigating great power rivalry while meeting domestic developmental needs.
India’s Balancing Act
India’s declaration to continue buying Russian oil despite U.S. tariffs reflects a calculated decision grounded in economic necessity and geopolitical pragmatism. The Trump administration’s tariff strategy aims to deter these purchases but faces resistance from New Delhi, which prioritizes energy security for its growing population and economy.
As India navigates this delicate balancing act, the broader impact on U.S.-India relations and global energy markets remains uncertain. The evolving dynamics underscore the limits of trade sanctions in reshaping long-established energy partnerships and the importance of negotiating constructive frameworks accommodating diverse national interests.