Russian Oil Resale: In a fiery post on his Truth Social platform, former US President Donald Trump accused India of exploiting the ongoing Russia-Ukraine war by purchasing discounted Russian crude oil and reselling it for profit. As a result, Trump announced plans to substantially increase tariffs on Indian goods, escalating trade tensions between two of the world’s largest democracies.
This latest development could reshape the economic dynamics between the US and India, especially as both countries gear up for major elections and seek stronger global influence.
Trump’s Accusation: “Profiting from War”
On Monday, August 4, Trump wrote:
“India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA.”
While Trump did not specify the new tariff percentage, the current 10% tariff is set to rise to 25% starting Thursday, according to an earlier announcement by US trade officials. This move comes amid growing concerns in Washington over India’s continued energy and defense ties with Russia, even as the war in Ukraine drags on.
Economic Jabs: “Dead Economies” and India’s Response
Just last week, Trump lashed out at both India and Russia, suggesting the two nations could “take their dead economies down together.” The statement sparked sharp backlash from New Delhi, where Indian Prime Minister Narendra Modi defended India’s economic growth trajectory.
During a rally in Varanasi, Uttar Pradesh, PM Modi declared:
“There is an atmosphere of global instability. All countries are focusing on their individual interests. India is set to become the third biggest economy in the world, and that is why India will have to stay alert as far as its economic interests are concerned.”
Trade Deficit and Tariff Friction
Trump’s grievances with India’s trade policies are not new. He has repeatedly pointed out the large US trade deficit with India, calling the country’s tariffs “among the highest in the world.” He also criticized India for having “obnoxious” non-monetary trade barriers that make it difficult for American companies to do business in the country.
Trump’s latest tariff threats come amid broader concerns in Washington over India’s continued reliance on Russian military equipment and energy imports, despite global calls to isolate Moscow diplomatically and economically.
US Sanctions and Diplomatic Pressure on Russia
Trump has also warned of new sanctions against Russia if it fails to show meaningful progress toward a peace deal with Ukraine by Friday. Meanwhile, Russia is reportedly preparing for high-level talks with Trump’s special envoy Steve Witkoff, who is expected to meet President Vladimir Putin later this week.
The geopolitical chessboard is shifting, and India finds itself in a complex position—balancing its historical ties with Russia, its growing trade with the US, and its ambition to lead the Global South.
Strategic Choices for India: Walking a Tightrope
India’s strategy of buying cheap Russian oil, refining it, and selling it on global markets has been widely viewed as a smart economic move, especially during a time of volatile energy prices. However, it has also attracted criticism from Western powers who see it as undermining sanctions on Russia.
While the move has helped ease inflation and secure energy needs domestically, it now risks provoking punitive trade actions from the United States, India’s largest export destination.
What This Means for Indian Exporters
If the 25% tariff is implemented as announced, it could significantly impact key Indian exports to the US, including:
- Textiles and apparel
- Pharmaceuticals
- Engineering goods
- IT services
- Automotive parts
This hike could lead to reduced competitiveness of Indian products in American markets and hurt India’s export earnings at a time when the country is trying to boost manufacturing under the ‘Make in India’ initiative.
Tensions Rising, Stakes Higher
Donald Trump’s latest rhetoric signals a new phase of assertiveness in US foreign and trade policy, especially toward strategic partners like India. While India has so far maintained a delicate diplomatic balance, the growing friction over energy deals and military alignments could force it to reassess its position on the global stage.
As the US prepares for elections and global pressure on Russia intensifies, India may find itself at the center of a high-stakes geopolitical and economic battle—one that could redefine global trade and power dynamics in 2025 and beyond.