The United States is reportedly urging India to reduce its imports of Russian crude oil as a crucial condition for finalizing a trade deal and lowering tariff rates. According to sources familiar with the discussions, US trade negotiators have conveyed to their Indian counterparts that addressing the Russian oil issue is essential for reaching a trade agreement.
This demand comes after the Trump administration increased tariffs on Indian products to 50% last month, with 25% specifically targeting India's crude oil imports from Russia. Washington's stance is that India's continued purchase of Russian oil undermines US efforts to pressure Moscow and cut off revenue streams that fund the war in Ukraine. A US official stated that while trade talks with India are progressing, further discussions are needed to resolve American concerns regarding market access, trade imbalances, and India's procurement of Russian oil.
India has responded firmly, maintaining its position on Russian purchases and calling the US actions "unfair, unjustified, and unreasonable". Despite the pressure, India has not shown willingness to halt Russian oil imports. In fact, India has proposed alternative solutions, including importing oil from Iran and Venezuela, as potential replacements for Russian crude.
During trade negotiations held in Washington from September 22-24, an Indian team led by Commerce Minister Piyush Goyal offered certain concessions to the US, such as easing restrictions on the import of genetically modified corn and increasing purchases of American defense and energy products. Goyal affirmed India's willingness to increase energy imports from the US in the coming years. However, these concessions have not yet led to a breakthrough in resolving the core disagreement over Russian oil.
US Energy Secretary Chris Wright has also weighed in, stating that India's imports of discounted Russian oil are indirectly funding the war in Ukraine. He emphasized that the US and other nations are ready to supply oil to meet India's needs, and urged India to reconsider its approach. Wright clarified that the US is not seeking to punish India but aims to build stronger ties in energy and trade while working together to end the conflict in Ukraine.
The US's trade deficit with India stood at $42.7 billion in 2024. To address the situation, officials have suggested that any significant reduction in Russian oil imports would require Washington to allow crude purchases from sanctioned suppliers like Iran and Venezuela.
