Synopsis:
India faces growing U.S. pressure to cut Russian oil imports as trade talks progress. While balancing economic and strategic interests, India seeks tariff relief and stable energy supplies. The upcoming trade deal may hinge on energy cooperation, testing India’s diplomatic balance between Washington and Moscow.
India faces rising US pressure to sharply reduce Russian oil imports, with sanctions on Russian energy giants and promises to cut down by year-end. While Russia recently supplied over a third of India’s crude, refiners are now pivoting to alternatives like US and Middle Eastern oil to balance economic, diplomatic, and strategic interests.
The U.S. could substantially slash tariffs on Indian exports as the two countries near a trade deal that could see a cut in oil purchases from Russia. As part of the trade deal, Washington could slash tariffs on Indian exports to 15 percent-16 percent from the current 50 percent.
On Tuesday, U.S. President Donald Trump stated that Indian Prime Minister Narendra Modi assured him India would reduce Russian oil purchases. Trump emphasized Modi’s desire to see the Russia-Ukraine conflict end but warned that failure to limit imports could result in “massive” tariffs, signalling continued U.S. pressure on India to align with Western energy and geopolitical priorities.
Further, India is exploring an increase in its annual import quota for non-GMO corn from the U.S., currently set at 0.5 million tonnes, despite a 15 percent import duty. The move includes discussions on a flexible mechanism allowing both countries to review tariffs and market access periodically, enhancing trade relations.
According to different sources, Prime Minister Modi confirmed a phone call with Trump, emphasizing continued cooperation against terrorism, without addressing Russia’s oil imports. Conflicting reports emerged, with Trump claiming India agreed to cut Russian oil, while India’s foreign ministry clarified that energy policies prioritize safeguarding domestic consumers, highlighting a careful approach amid volatile global oil markets.
Strategic pressure point
Russian oil remains a key sticking point in U.S.-India trade discussions. Trump imposed an additional 25 percent tariff on Indian exports in August over its Russian oil imports, raising total duties to 50 percent, straining bilateral relations and complicating efforts to expand trade despite prior agreements.
Indian officials stress that halting Russian oil purchases requires a clear plan to stabilize energy markets and address potential supply gaps. Earlier, both nations aimed to boost bilateral trade to $500 billion by 2030, but talks stalled over India’s reluctance to open its agricultural and dairy sectors, highlighting ongoing negotiation challenges.
U.S.-India tensions intensified after Modi met Putin and Xi in Beijing, signaling India’s intent to maintain strong ties with Russia. India has emerged as the world’s second-largest buyer of Russian crude, importing 1.6 million barrels per day in H1 2025, a sharp increase from 50,000 bpd in 2020, reflecting its strategic energy priorities amid the Ukraine conflict.
The U.S.-India trade agreement is expected to be finalized and communicated during the ASEAN summit, though neither Trump nor Modi has confirmed attendance. Reports suggest most terms are agreed upon, but sensitive issues like agriculture and energy still require political approval before the deal’s official announcement.
Bilateral trade between the two nations reached a record $132.2 billion in FY25, rising over 10 percent from the previous year. India’s exports to the U.S. increased 11.6 percent to $86.51 billion, while imports grew 8 percent to $45.69 billion, reflecting deepening economic ties despite ongoing trade challenges.
Conclusion
India’s stance on Russian oil imports reflects a delicate balance between economic policy and geopolitical pressure. While U.S. incentives and tariff cuts could encourage reduced dependence on Russian crude, India remains focused on ensuring energy security and price stability, navigating strategic ties with both nations to protect its national and consumer interests amid global uncertainty.
Written by Abhishek Singh
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