Donald Trump has issued threats of increasing tariffs substantially on Indian imports due to India’s continued purchases of Russian oil as an excuse. This action marks an escalation in trade tensions between Washington and New Delhi.
Trump made these claims in a Truth Social post made on August 4.
“India is purchasing vast amounts of Russian oil while then selling much of it back on the open market for big profits without caring about how many Ukrainian civilians may die due to Russia’s War Machine. Because of this, I will substantially raise India’s tariff payments to the USA.”
New York Post/Reuters + 12 @ The Economic Times.
Trump has already implemented a 25% tariff on Indian goods since early August, and this escalation may presage even steeper penalties in the future. Reports indicate tariffs could reach 100% or beyond on countries maintaining energy trade with Russia should it fail to make progress toward peace talks between Kiev and Moscow.
Wikipedia +5 (The Economic Times + The Times).
India quickly responded, condemning these threats as unwarranted and unreasonable. A spokesperson from New Delhi’s Ministry of External Affairs defended its energy strategy based on need, with imports from Russia necessary due to traditional suppliers leaving for Europe as a result of Russia’s invasion. In accordance with its official stance “India will take all necessary measures in order to safeguard its national interests and economic security” The Times, Economic Times and The Times of India published articles reporting this incident.
State-run refiners were reported to have temporarily suspended purchases of Russian oil ahead of sanctions; however, government officials denied this development, reinforcing India’s strong and historical relationship with Russia. Its Reuters +2 The Times.
India was also one of the biggest importers of Russian crude by seaborne trade, taking an estimated 1.75 million barrels a day from January through June 2025 – an increase of roughly one percent year-on-year (Reuters +2).
Indian Equities Have Been Hard Hit
Indian equities have felt the impact of economic uncertainty; investors anticipate a flat open amid trade insecurities. Foreign investor outflows continued for an 11th straight session while analysts suggest the Reserve Bank may consider cutting interest rates to ease any negative economic repercussions.
Gold prices rose following tariff threats, prompting an unprecedented rush into safe-haven assets; gold in India rose about Rs1,600 per 10 grams year-to-date gains totalling Rs24,400 (The Economic Times).
Expert Perspective Foreign affairs specialist Robinder Sachdev expressed concern at Donald Trump’s selective targeting of India, noting China purchased more Russian oil (around $62.6 billion vs India’s $52.7 billion) but received less criticism. Sachdev cautioned India may lose $20-30 billion under expanded tariffs while adding they should adapt quickly to his unpredictable trade stance (indeed, they likely already have). For more information visit Ndtv.com
Trump’s remarks echo a wider U.S. strategy aimed at indirectly pressuring Russia by targeting its economic partners. A bipartisan Senate bill, the Sanctioning Russia Act of 2025, proposes penalties of up to 500% on nations continuing to import Russian energy without supporting Ukraine; Trump himself has so far focused on 100% secondary tariffs as punishments.
India and the U.S. have historically enjoyed strong relations, cemented by personal bonds between Prime Minister Narendra Modi and Trump. Yet recent tensions–such as discussions regarding oil deals with Pakistan or inaction regarding Chinese purchases–have created tension and caused strain to their bilateral ties, prompting some analysts to warn about its consequences to diplomatic and economic partnerships built over years.
As August 7 approaches and Trump issues his ultimatum to Moscow, global markets and governments alike will closely follow how Russia responds, as well as whether US president Donald Trump follows through with additional secondary sanctions against them. For now, India appears poised to pursue its energy strategy while keeping an eye on any possible fallout from an unpredictable trade battleground.