India will buy Russian oil despite Trump’s threats

India has signalled its intention to continue purchasing Russian oil despite mounting pressure from the United States, as President Donald Trump imposed a 25% tariff on Indian imports alongside additional penalties targeting the nation’s energy trade with Moscow. The move escalates tensions between the world’s two largest democracies over India’s energy security strategy and its relationship with Russia during the ongoing Ukraine conflict.

Tariff escalation follows energy standoff
Trump announced the tariff measures on Wednesday, criticising India for maintaining “among the highest tariffs in the World” whilst also condemning the country’s purchases of Russian energy and military equipment, which he argued enables the war in Ukraine. The president indicated he would impose an additional “penalty” starting on Friday as part of his administration’s revised tariff strategy targeting multiple countries.

The tariff threat comes as India’s Russian oil imports have surged dramatically from just 0.2% to 40% of total imports following the Ukraine war, making the South Asian nation one of Moscow’s largest energy customers. This shift has drawn increasing scrutiny from Washington and Brussels as Western powers seek to isolate Russia economically.

India maintains energy sovereignty stance
In a sharp response to Trump’s tariff announcement, India’s central government has reaffirmed its commitment to protecting national interests, with particular focus on farmers, entrepreneurs, and energy security. The defiant stance suggests New Delhi will not bow to American pressure over its energy procurement policies, despite the economic implications of the new tariffs.

Indian oil refiners have sought clarification from the government regarding whether their Russian crude purchases will be affected by Trump’s latest threats. However, the government’s assertive response indicates that Russian oil purchases will continue, prioritising domestic energy needs over diplomatic pressure.

Market reactions and industry impact
The escalating trade dispute has already begun affecting market dynamics. India’s state-owned oil refiners have reportedly halted Russian crude imports over the past week as discounts have narrowed and Trump’s tariff warnings have created uncertainty. Meanwhile, India’s largest oil refiner has purchased millions of barrels from the US and UAE as the nation faces mounting pressure over its Russian purchases.

The threats have prompted Indian refiners to rush back to the market seeking alternative crude supplies, raising concerns about potential disruptions to oil flows. This market volatility underscores the broader implications of using trade policy to influence energy partnerships during geopolitical conflicts.

Strategic implications for bilateral relations:
Trump’s escalating pressure on India has called into question the prospects of future trade deals between the two key partners. The dispute highlights the complex balancing act India faces as it seeks to maintain strategic autonomy whilst managing relationships with both Washington and Moscow.

The standoff reflects broader tensions over how emerging economies navigate great power competition, particularly regarding energy security and economic sovereignty. India’s position suggests that, despite American pressure, major developing nations may prioritise their economic interests over alignment with Western sanctions regimes.

As the August tariff deadline approaches, the dispute tests the resilience of the US-India strategic partnership whilst highlighting the limitations of economic coercion in reshaping global energy flows during wartime.

REFH – Newshub, 2 August 2025