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Aug 5, 2025: Less than a week after imposing 25 per cent tariffs on Indian goods, US President Donald Trump on Monday warned he would “substantially” increase the levies over India’s purchase of Russian oil amidst the Ukraine war. The remark drew a sharp response from New Delhi, with the Ministry of External Affairs calling the targeting of India “unjustified and unreasonable” and asserting that it would take all necessary measures to “safeguard its national interests and economic security like any major economy”.
Trump wrote, "They don't care how many people in Ukraine are being killed by the Russian war machine," in a post on Truth Social that said India was making money by reselling Russian oil on the open market. As a result, I will substantially increase India's tariff payment to the United States. In response, New Delhi stated that India's imports were intended to guarantee Indian consumers affordable and predictable energy costs. “India has been targeted by the US and the European Union for importing oil from Russia after the commencement of the Ukraine conflict. These imports are a necessity compelled by global market conditions. However, it is instructive that the nations that criticize India also conduct business with Russia. The MEA stated in a statement late on Monday that, in contrast to our situation, such trade is not even a crucial national requirement. The ministry said that the European Union and Russia had bilateral trade worth €67.5 billion in goods in 2024 and €17.2 billion in services in 2023, which was significantly more than India's total trade with Russia in that time frame. "In 2024, European LNG imports surpassed the previous record of 15.21 million tonnes set in 2022 to reach a record 16.5 million tonnes. It stated that trade between Europe and Russia includes not only energy but also fertilizers, mining products, chemicals, iron and steel, machinery, and transportation equipment. The ministry noted that the United States continued to import Russian fertilizers and chemicals for its EV sector, palladium for its nuclear industry, and uranium hexafluoride for its nuclear industry. New Delhi also underlined that India began importing more from Russia after traditional suppliers diverted their shipments to Europe following the outbreak of the conflict. According to the ministry, "at that time, the US actively encouraged such imports by India to help stabilize global energy markets." Just two days earlier, Trump claimed, citing media reports, that India had stopped purchasing oil from Russia. This was followed by his latest threat of tariffs. Officials in India refuted this claim, stating that the nation would not be put under pressure and would continue to purchase oil from the most competitive suppliers. India, the third-largest oil importer in the world, sourced over 30% of its crude from Russia in 2024, up from 0.2% before the Ukraine conflict due to Moscow's substantial discounts. The latest US tariffs, set to take effect August 7, target Indian imports and include threats of additional penalties for defence and energy deals with Russia. While Trump initially paused these measures for negotiations, the failure to secure agreements has led to their revival.
An official stated that the Union Government is considering providing assistance to the sectors that have been harmed the most by the US tariffs. A government official stated, "The government also expects that not all the sectors will be dented by the levies and on certain tariff lines, the exporters would be able to bear the brunt," adding that "the government hopes that US importers can absorb some of the cost, given America’s strong purchasing power, but contingency plans, including possible financial support for exporters, are under discussion." The worst-hit industries include textiles and apparel, which have an exposure of $10.7 billion. “The government is holding meeting with the stakeholders to assess the impact and it may soon come up with a support package,” the official said. Additionally, New Delhi is also pinning hopes on the next round of bilateral trade talks scheduled for August 25 to mitigate the crisis.
The tariffs could reduce India's US exports by nearly 30%, from $86.5 billion in 2024-2025 to $60.6 billion in 2025-2026, according to analysts. According to the Global Trade Research Initiative, India is severely outstripped by rivals like Vietnam, Bangladesh, and Mexico, which enjoy lower or no tariffs, by the duties.