India’s continued purchase of Russian oil is a central factor in the escalating trade tensions with the United States. Last month, the US increased tariffs on all Indian imports to 50% specifically in response to these energy deals. Now, that pressure is set to intensify dramatically, with President Trump proposing a new 100% tariff in which he wants the EU to participate.
The initial 50% tariff was a clear warning shot from Washington to New Delhi, signaling its displeasure with any economic activity seen as supporting Russia’s war effort in Ukraine. Despite this punitive measure, India has maintained its energy trade with Moscow, a key source of revenue for the Kremlin.
This has led to Trump’s latest proposal, a massive escalation that would target not only India but also China, Russia’s other major economic partner. The plan, discussed with EU officials, aims to create an economic crisis for Russia’s allies, thereby forcing a change in their foreign policy.
This focus on India’s oil purchases highlights the complexities of global energy markets and sanctions policy. While the US seeks to punish India for its trade with Russia, it is also engaging in separate, friendly trade negotiations with the Modi government, creating a mixed and often contradictory set of signals from Washington.