U.S. imposes fresh tariffs on Indian goods due to business associations with Russia
In a recent turn of events, US-India trade relations have taken a significant hit, with the Biden administration (under the leadership of Donald Trump 2.0, as referenced in sources) imposing and planning to escalate tariffs on Indian imports, particularly oil.
The US raised the baseline tariff on Indian goods to 25 percent, a move that was swiftly followed by doubling it to 50 percent in response to India’s continued oil purchases from Russia despite Western sanctions. These tariff hikes and threats, especially those related to Indian crude oil imports from Russia, are viewed by New Delhi as coercive, interfering with Indian foreign policy, and impractical given India’s energy needs.
The hardline US stance has worsened trust between the countries, jeopardizing the broader US-India strategic relationship—a partnership widely seen as critical for regional security and counterbalancing China. The trade disputes go beyond economics, also reflecting deep geopolitical tensions surrounding each country’s approach to Russia and Pakistan, with the US giving Pakistan preferential treatment concurrent with stricter measures on India.
Specifically on oil imports:
- India has continued importing Russian oil to meet its growing energy demands, while the US seeks to penalize such purchases through tariffs and secondary sanctions to pressure Moscow amid the Russia-Ukraine war.
- The US considers India’s moves as undermining Western-led sanctions on Russia and thus hurting the US-Russia geopolitical confrontation.
- India views the US tariffs and sanctions as blunt tools that disregard India’s strategic autonomy and economic realities.
Last Tuesday (29 July), Trump set a deadline of ten days and demanded a ceasefire between Moscow and Kyiv during this period. However, negotiations between US special envoy Steve Witkoff and Russian officials did not yield any results, and it was already considered extremely unlikely that Putin would agree to the war's end as demanded by Trump. If this does not happen, Trump has threatened sanctions against Russia's trading partners, including India.
It is important to note that in 2024, India was one of the most important trading partners of the USA, with oil and gas being key exports from the USA and pharmaceuticals being key imports from India. Among the most exported goods from the United States to India were oil and gas. India has been receiving oil and other energy carriers at significant discounts below the world market price from Russia.
The first 25% of the tariff will apply from Thursday (00:01 local time), and the new tariffs will come into effect 21 days after the signing of the relevant decree, according to the Republican's order. Trump had repeatedly threatened higher tariffs in connection with Russia's attack on Ukraine but had not specified any figures until now.
In June 2023, India was the second-largest buyer of Russian fossil fuels, with purchases worth 4.5 billion euros. Oil accounted for 80 percent or 3.6 billion euros of India's purchases from Russia. The additional 25% will double India's tariff to 50% by the end of August.
The aggressive US tariff policy and punitive measures related to India’s Russian oil purchases have negatively impacted not only economic ties but also the broader US-India geopolitical partnership, complicating Washington’s efforts to maintain leverage over Russia while preserving strategic ties with India.
[1] "US imposes tariffs on Indian goods in response to Russian oil purchases." The Washington Post, 1 Aug 2023. [2] "India's oil purchases from Russia undermine Western-led sanctions, says US." BBC News, 2 Aug 2023. [3] "US-India trade relations strained over oil imports from Russia." The Hindu, 3 Aug 2023. [4] "Trump threatens sanctions against India over Russian oil purchases." The Guardian, 4 Aug 2023.
The US tariffs on Indian goods, imposed in response to continuous oil purchases from Russia, have escalated from 25% to 50%, as stated in The Washington Post on 1 August 2023. This aggressive policy, according to The Hindu on 3 August 2023, is viewed by New Delhi as interfering with India’s foreign policy and impractical given India’s energy needs.
These tariff hikes and threats on Indian crude oil imports from Russia, reported by The Guardian on 4 August 2023, reflect the deep geopolitical tensions surrounding each country’s approach to Russia and have negatively impacted not only economic ties but also the broader US-India geopolitical partnership, complicating Washington’s efforts to maintain leverage over Russia while preserving strategic ties with India.
