The United States and India, despite historically cordial relations, are facing a new point of contention as a former aide to Donald Trump has sharply criticized India's continued purchase of Russian oil. Peter Navarro, Trump's trade advisor, has gone so far as to accuse India of prolonging the war in Ukraine and has controversially dubbed the conflict "Modi's war".

Navarro's criticism centers around the idea that India's purchase of discounted Russian oil is indirectly funding Russia's war efforts, harming American interests, and increasing costs for American taxpayers. He has also claimed that India could get a 25% reduction in US tariffs if it stops buying Russian oil. This statement comes in the wake of the Trump administration's decision to double tariffs on Indian goods to 50%, a move perceived as a punishment for India's continued reliance on Russian crude. The initial 25% tariff went into effect on August 7th.

India, on the other hand, has maintained a firm stance on its energy policy, asserting its right to make sovereign decisions in its best economic interest. Indian officials have stated that the country's energy security is paramount and have rejected what they perceive as unjustified pressure from the United States. They also pointed out the hypocrisy of the West, noting that Europe continues to trade significantly with Russia.

India has emerged as one of the largest buyers of Russian crude since Western sanctions cut Moscow off from many markets after its invasion of Ukraine in 2022. By mid-2024, India was importing around 1.5-1.6 million barrels per day of Russian oil, meeting nearly 40% of its crude needs. This shift has allowed Indian refiners to secure cheaper supplies, resulting in savings of approximately $10-25 billion since 2022. These savings have helped reduce inflationary pressure, improve the trade balance, and enhance the competitiveness of energy-intensive industries.

Despite the increased tariffs and criticism, India is expected to increase its imports of Russian oil in September. Preliminary trade data suggests that Indian refiners, led by Reliance Industries and Nayara Energy, are likely to increase Russian oil purchases by 10-20% from August levels. This move is driven by cheaper prices and Russia's increased export availability.

Some experts argue that India's imports of Russian oil provide a much-needed check on crude oil prices and curb the risk of global inflation. They also believe that the issue has become a political one, with India reiterating its freedom to choose its trade partners within the purview of global trade rules.

The US Treasury has characterized India's continued Russian oil purchases as "profiteering" from the Ukraine conflict. The US administration's objectives include forcing India to significantly reduce or eliminate Russian oil imports, demonstrating the economic costs of circumventing Western sanctions, and preventing Russia from using energy exports to finance its military operations.

While the Biden administration initially viewed India's increased Russian oil purchases as a mechanism to keep global oil prices stable, the Trump administration has taken a harsher stance, imposing tariffs and publicly criticizing India's actions.

The situation remains complex, with potential implications for US-India relations, global energy markets, and the ongoing conflict in Ukraine. Some in the U.S. House Foreign Affairs Committee have criticized the Trump administration for singling out India, while other nations buy more Russian oil. India insists on prioritizing its commercial interests and has asserted that strategic partners should not engage in bullying tactics.