US President Donald Trump recently claimed that Russia has "lost an oil client" in India following Washington's announcement of penalties targeting New Delhi over its continued purchases of Russian crude oil.

The US had imposed a 25% additional duty on Indian goods, especially targeting India's import of Russian oil, which is set to come into effect on August 27, 2025. This comes in addition to a previous 25% tariff, making the potential total US tariff on Indian goods 50%, the highest alongside Brazil. 

Despite these tariffs, Indian officials, including Indian Oil Corporation chairman AS Sahney, have stated that India has not officially halted its oil purchases from Russia and continues to buy solely based on economic considerations.

Trump indicated that while he might impose further secondary sanctions or tariffs on countries like India and China that continue to import Russian oil, he may also decide against doing so. He said, "If I have to do it, I'll do it. Maybe I won't have to do it," signaling some flexibility amid strong US pressure. 

India, however, has strongly condemned the US move as "unfair, unjustified and unreasonable," with Prime Minister Narendra Modi affirming that India would not succumb to economic pressure. The sectors likely to be hard hit by these tariffs include textiles, marine, and leather exports.

India became the largest customer of Russian oil in 2022 after Western countries imposed sanctions and shunned Russian oil following Russia's invasion of Ukraine. Data intelligence reports show that Russian crude has been offered to Indian buyers at discounted prices due to sanctions and the global demand shift.

State-owned refiners like Indian Oil Corp and Bharat Petroleum reportedly continue sourcing Russian oil, although some media reports suggest they have reduced or paused direct purchases since the tariff announcements, shifting slightly toward other suppliers such as Saudi Arabia, the United States, Brazil, and Middle Eastern countries. Private refiners like Reliance and Nayara Energy continue some Russian crude imports via term contracts.

A State Bank of India report estimated that if India were to completely stop buying Russian crude, its crude oil import bill could increase by $9 billion in the current financial year and by $12 billion in the next. The report suggested that India could consider increasing imports from Iraq, Saudi Arabia, and the UAE to offset the reduction in Russian supplies.

The situation reflects a complex balance between US geopolitical pressure, India's energy security needs, economic interests, and ongoing global energy market dynamics. Despite US tariffs and threats, India prioritizes economic considerations in its energy purchasing decisions while exploring ways to diversify its oil sources in response to evolving international pressure and sanctions landscape. Trump's tariff threat remains a key diplomatic and economic lever, but there is uncertainty if secondary sanctions tariff escalation will materialize immediately or at all, given Trump's recent comments signalling he "maybe won't have to do it."

This ongoing development is set against the backdrop of Trump's high-stakes meeting with Russian President Vladimir Putin in Alaska, emphasizing the intertwined geopolitical and economic negotiations involving India, Russia, and the US over the future of Russian oil trade amidst the Ukraine conflict.

Based On ANI Report