Amidst escalating global tensions, the United States has intensified its trade pressure on India, threatening further tariffs ahead of President Donald Trump's crucial meeting with Russian President Vladimir Putin in Alaska. The move is rooted in Washington's dissatisfaction with New Delhi's continued import of discounted Russian crude oil, which the U.S. views as "fuelling" Russia's war efforts in Ukraine. This development has further strained the already complex U.S.-India relationship, prompting strong reactions from both sides.
U.S. Treasury Secretary Scott Bessent issued a stern warning, indicating that secondary tariffs on India could be increased depending on the outcome of the Trump-Putin talks scheduled for Friday. Bessent highlighted that Washington had already imposed secondary tariffs on India for its Russian oil purchases and suggested that more severe measures, including sanctions, were possible if negotiations with Moscow failed to yield desired results.
India's increased reliance on Russian oil since the start of the Ukraine war has been a major point of contention. In 2024, Russian oil accounted for 35-40% of India's total crude imports, a significant jump from just 3% in 2021. India has defended its position, citing its need to secure affordable energy for its large population amid volatile global prices. However, this justification has not eased U.S. concerns, which view India's actions as undermining the efforts to isolate Russia economically.
The U.S. stance is that India's continued trade with Russia provides a financial lifeline to Moscow, enabling it to sustain its military operations in Ukraine. Trump has warned of "very severe consequences" if Putin doesn't agree to end the war after the meeting. Trump has also expressed his desire for a three-way meeting between himself, Putin, and Ukrainian President Volodymyr Zelenskyy "almost immediately" if Friday's summit with the Russian leader goes well.
In response to the renewed tariff threats, India's Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal affirmed that India–U.S. relations are a comprehensive global strategic partnership. While not directly addressing the tariff issue, Jaiswal's statement underscored the importance India places on its relationship with the U.S., suggesting a willingness to engage in dialogue and find a mutually acceptable resolution.
India has consistently maintained its sovereign right to make independent decisions on energy procurement, emphasizing its commitment to its own economic and strategic interests. However, the U.S. has shown little flexibility on the matter, with Trump determined to exert maximum pressure on Russia and those who continue to do business with it.
The potential economic consequences for India are significant. The U.S. is one of India's largest export partners, and increased tariffs could negatively impact several key sectors, including textiles, gems and jewellery, and auto components. The Indian Council for Research on International Economic Relations (ICRIER) estimates that almost 70% of India's exports now face the brunt of the US President Donald Trump's recently announced 50% tariff hike. Small and medium enterprises (MSMEs), which dominate textiles and leather, face reduced competitiveness against rivals in Vietnam and Bangladesh, where tariffs are lower.
India is exploring alternative strategies to mitigate the impact of the U.S. tariffs. These include diversifying its export markets, strengthening trade ties with other countries, and promoting domestic manufacturing through initiatives such as the Production Linked Incentive (PLI) scheme. India finalized a $34 billion India-UK FTA in July 2025, granting near-tariff-free access to the UK market. India's Bharat-Africa Setu initiative has unlocked new markets in Africa, where pharmaceuticals, auto components, and agriculture exports grew 17% in 2024.
The current situation presents a complex challenge for both the U.S. and India. While the U.S. is focused on pressuring Russia to end the war in Ukraine, India is prioritizing its energy security and economic growth. Finding a balance between these competing interests will require careful diplomacy and a willingness to compromise. The outcome of the Trump-Putin summit in Alaska will likely play a crucial role in shaping the future of U.S.-India relations.
