Trump Intends to Boost Tariffs on Indian Imports Due to Alleged Resale of Russian Crude Oil
The United States has imposed a new 25% tariff on imports of Russian oil from India, as part of an escalating trade dispute between the two countries. This tariff, authorised under the International Emergency Economic Powers Act (IEEPA), targets all goods from India associated with Russian-origin oil, and comes on top of other applicable tariffs, including a previous 25% IEEPA Reciprocal tariff.
The tariff, effective on imports entered after September 17, 2025, with certain exemptions, marks a significant escalation in trade tensions between the U.S. and India. Indian importers and exporters must now navigate layered tariffs and exemptions, requiring precise classification and potential drawback filings to mitigate financial burdens.
The U.S. strategy aims to disincentivize India’s purchase and resale of Russian oil by raising costs for Indian exports, potentially impacting India’s trade balance and relations with the U.S. The tariffs are a response to India's purchases of Russian energy and military equipment, which the U.S. finds unacceptable, as it funds the conflict in Ukraine.
This tariff regime may affect bilateral trade, complicate supply chains, and influence global crude oil trade patterns. Compliance complexities arise as Indian importers and exporters must navigate layered tariffs and exemptions, requiring precise classification and potential drawback filings to mitigate financial burdens.
The U.S. move follows Donald Trump's plans to stop New Delhi from buying Russian oil, and his threats of sanctions over Russian oil purchases. Despite these plans, some Indian refineries have continued imports of Russian oil, with tracking data showing that 4 tankers carrying 3 million barrels of Russian oil were unloaded over the weekend in India.
India continues to import Russian oil, despite the tariffs and the warnings from the U.S. The country expressed hope for a trade agreement with the U.S. at the end of July, but it remains to be seen how this latest development will impact those negotiations.
[1] White House Statement on Tariffs on Indian Imports [2] Bloomberg Report: India Not Abandoning Russian Oil Supplies Despite U.S. Warnings [3] U.S. Trade Representative Fact Sheet on IEEPA Russian Oil Tariff on Indian Imports
- This new tariff on Indian imports of Russian oil is not only a trade issue, but also a part of the broader politics, policy-and-legislation, and general-news surrounding war-and-conflicts, as it is a response to India's purchases of Russian energy that funds the conflict in Ukraine.
- The compliance complexities arising from layered tariffs and exemptions in the U.S.-India trade of Russian oil could significantly impact the politics between the two countries, potentially influencing policy-and-legislation related to war-and-conflicts and general-news involving international trade disputes.
