India's Response to US Tariffs on Russian Oil Trade

India is poring over the fine print of Washington’s latest tariff move, acutely aware that its booming trade in Russian oil now sits squarely in the crosshairs.

Commerce Minister Piyush Goyal said on Monday that New Delhi is studying the details of new US tariffs targeting buyers of Russian crude. His remarks come just days after Washington cleared a sanctions-and-tariffs package that hands US President Donald Trump the authority to slap punitive duties of up to 100% on India, China and any country still leaning on Russian energy.

For India, that’s not an abstract threat. It cuts right into the heart of its wartime energy strategy.

A partnership deepens, another frays

Since the invasion of Ukraine, India’s ties with Moscow have tightened, fuelled by a surge in discounted Russian oil exports that have helped cushion domestic inflation and keep growth humming. Tankers from Russian ports have effectively become a lifeline for India’s refineries.

The picture with Washington is far less comfortable.

Under Prime Minister Narendra Modi, India-US relations have been tested repeatedly over New Delhi’s refusal to scale back those Russian purchases. The friction turned into hard numbers last August, when Trump hit Indian imports with an extra 25% tariff explicitly linked to its Russian oil buying — on top of an existing 25% reciprocal tariff already in place.

The double layer of duties rattled exporters and injected new uncertainty into what had been billed as a maturing strategic partnership.

Some relief arrived in February 2026. The Russia-related surcharge was scrapped, and the reciprocal tariff was trimmed from 25% to 18% under a new US-India trade framework. That deal was hailed at the time as a “landmark” step toward a broader bilateral trade agreement.

Yet the grand bargain has stalled. The framework exists on paper; the full-fledged agreement does not.

A deal in limbo, leverage on the table

That unfinished trade pact now hangs over every move. With no significant breakthrough since, the threat of fresh tariffs has become Washington’s most obvious pressure point.

Analysts argue the new authority to impose duties of up to 100% is less about immediate escalation and more about leverage — a bargaining chip to extract concessions from India on market access, digital rules, or a gradual recalibration of its Russian energy dependence.

For New Delhi, the calculation is delicate. Russian oil has delivered clear economic benefits, but the cost of alienating the US — a critical partner on technology, investment and security — is rising.

Goyal’s careful language on Monday reflected that tightrope. India will scrutinize the US move, measure its options and, as ever, try to keep both oil flowing from the north and trade open to the west.

The question now is how long it can keep that balance before Washington demands a harder choice.