US President Donald Trump has hinted that Washington may not enforce a proposed secondary tariff on India over its purchase of Russian oil, even as New Delhi faces steep duties on its exports.
The remarks came after Trump claimed Russia had lost India as a key oil client following Washington’s tariff announcement, though India has not officially confirmed halting crude imports from Moscow.
Tariff move escalates trade tensions
Earlier this month, Washington imposed an additional 25% duty on Indian goods, later doubling it to 50%, citing India’s continued oil imports from Russia. The new tariffs are scheduled to take effect on August 27. India strongly condemned the move as “unfair, unjustified and unreasonable,” warning that sectors like textiles, marine and leather exports would be hit hard.
Prime Minister Narendra Modi maintained that New Delhi would not yield to economic pressure. India, alongside Brazil, now faces the highest US tariff rate under Trump’s trade measures.
Confusion over India’s oil imports
While a Bloomberg report suggested that Indian state-owned refiners stopped purchasing Russian crude after Washington’s action, Indian Oil Corporation chairman AS Sahney clarified that imports from Russia continue, based on “economic considerations.”
India emerged as Russia’s largest oil customer in 2022 after Western sanctions restricted Moscow’s access to European markets. China and India remain the two largest buyers of Russian crude.
Rising costs if imports shift
According to a State Bank of India report, New Delhi’s oil import bill could rise by USD 9 billion this financial year and USD 12 billion in the next if Russian supplies are halted. Iraq, Saudi Arabia and the UAE may serve as alternative suppliers.
Meanwhile, data firm Kpler Ltd noted that Russia is offering crude at discounted rates to Indian buyers as demand weakens under EU sanctions and US tariff threats.
Trump signals softer stance
Speaking to US media before departing for a high-stakes meeting with Russian President Vladimir Putin in Alaska, Trump said:
“He (Putin) lost an oil client, so to speak, which is India, which was doing about 40 per cent of the oil… And if I did what’s called a secondary sanction, or a secondary tariff, it would be very devastating. If I have to do it, I’ll do it. Maybe I won’t have to do it.”