Published by Global Banking & Finance Review®
Posted on August 5, 2025
4 min readLast updated: January 22, 2026
Add as preferred source on GoogleTrump threatens to increase tariffs on Indian imports due to India's Russian oil purchases, straining US-India trade relations.
By Andrea Shalal and Aftab Ahmed
WASHINGTON/NEW DELHI (Reuters) -U.S. President Donald Trump said on Tuesday he would increase the tariff charged on imports from India from the current rate of 25% "very substantially" over the next 24 hours, in view of New Delhi's continued purchases of Russian oil.
He also said a "zero tariff" offer for imports of U.S. goods into India was not good enough, alleging that India was "fuelling the war" in Ukraine.
Trump's threat to India over its purchases of Russian oil started on July 31, when he announced a 25% tariff for Indian goods, along with an unspecified penalty.
"They're fuelling the war machine, and if they're going to do that, then I'm not going to be happy," Trump told CNBC in an interview on Tuesday, adding that the main sticking point with India was that its tariffs were too high.
"Now, I will say this, India went from the highest tariffs ever. They will give us zero tariffs, and they're going to let us go in. But that's not good enough, because of what they're doing with oil, not good."
An Indian government source said that India's purchases of Russian oil have helped to stabilise global oil prices by easing the pressure on supplies from other regions.
India, the world's third biggest oil importer and consumer, buys more than a third of the oil it needs from Russia.
"If we stop buying Russian oil, who will replace those barrels to maintain balance (in the market) and at the same time prevent the prices from shooting up? We don't want a repeat of 2022 when prices shot up to $137 a barrel," the source said, referring to the oil market spike around the time when Moscow's invasion of Ukraine began.
The official spoke on condition of anonymity because the source was not authorised to speak to the media.
Trump's latest comment followed a similar threat on Monday, which prompted India's Foreign Ministry to say the country was being unfairly singled out over its purchases of Russian oil.
"It is revealing that the very nations criticising India are themselves indulging in trade with Russia (despite the Ukraine war)," it said in a statement issued late on Monday.
"It is unjustified to single out India," it added.
The EU conducted 67.5 billion euros ($78.0 billion) worth of trade with Russia in 2024, including record imports of liquefied natural gas that totalled 16.5 million metric tons, the Indian ministry said.
The United States continues to import Russian uranium hexafluoride for use in its nuclear power industry, palladium, fertilisers and chemicals, it added, without giving a source for the export information.
The U.S. embassy and the EU's delegation in New Delhi did not immediately respond to a request for comment.
Both the United States and EU have reduced their trade ties with Russia since it launched its full-scale invasion of Ukraine.
SUDDEN RIFT
India imported about 1.75 million barrels per day of Russian oil from January to June this year, up 1% from a year ago, according to data provided to Reuters by trade sources.
It has faced pressure from the West to distance itself from Russia over the Ukraine war. New Delhi has resisted, citing its longstanding ties with Moscow and economic needs.
India's National Security Adviser Ajit Doval is likely to go ahead with a scheduled visit to Russia this week, two government sources said. Foreign Minister S. Jaishankar is expected to visit in the coming weeks.
The sudden rift between India and the U.S. has been deepening since July 31.
Trump has said that from Friday he will impose new sanctions on Russia as well as on countries that buy its energy exports, unless Moscow takes steps to end the war with Ukraine.
The trade tensions have caused concern about the potential impact on India's economy.
The equity benchmark BSE Sensex .BSESN closed down 0.38%, while the rupee dropped 0.17% versus the dollar.
(Additional reporting by Shivan Patel and Nidhi Verma;Editing by Helen Popper, Gareth Jones and Barbara Lewis)
Oil imports are crucial for countries that lack sufficient domestic production, impacting energy security, trade balances, and economic stability.
Economic growth is the increase in the production of goods and services in an economy over a period, typically measured by GDP.
Import and export regulations are laws and guidelines that govern the movement of goods across borders, affecting tariffs, quotas, and trade agreements.
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