Key Points:
- Trump warns of rapid tariff escalation beyond current 50% level on Indian goods
- India imported record 7.7 million tons of Russian oil in November 2025, representing 35.1% of total oil imports
- Trump claims PM Modi previously assured him India would stop buying Russian oil
- US alleges Russia uses oil revenue to fund military operations in Ukraine
- India maintains its energy security strategy relies on accessing cheaper Russian oil
- Trade tensions spike as India simultaneously increased US oil purchases but not enough to satisfy Washington
US President Donald Trump has reignited trade tensions with India over its continued energy partnership with Russia, threatening to impose tariffs beyond the existing 50% rate. The warning came after new trade data revealed India imported 7.7 million tons of Russian crude oil in November 2025, marking a 7% year-over-year increase and the highest monthly volume since May 2025.
Speaking to reporters, Trump delivered a pointed message referencing his relationship with Prime Minister Narendra Modi. “They really wanted to make me happy. PM Modi is a very good man. He understood that I wasn’t happy, and it was important for him to make me happy. We can increase tariffs on them very quickly,” Trump stated, suggesting the current trade penalties could be ratcheted up within weeks rather than months.
Broken Promises and Strategic Concerns
The latest figures have triggered fresh accusations from Washington that New Delhi reneged on private diplomatic assurances. Trump claimed that during bilateral discussions several months prior, Modi had indicated India would phase out Russian oil purchases. Instead, the November data shows Russia’s share of India’s oil basket reached 35.1%, cementing its position as India’s top energy supplier despite Western sanctions.
US officials have long argued that Russian oil revenues directly finance military operations in Ukraine. The Trump administration previously accused India of not only undermining sanctions but also profiting by refining Russian crude and selling petroleum products to third countries at market rates. Energy analysts note this practice, while legal under current sanctions frameworks, creates diplomatic friction as it technically circumvents the spirit of Western restrictions.
India’s Energy Security Calculations
Indian government sources, speaking on condition of anonymity, defended the procurement strategy as essential for national energy security. With domestic consumption growing at 4-5% annually and limited domestic reserves, India requires cost-effective supply sources to manage its import bill and control inflation. Russian crude typically trades at discounts of $15-20 per barrel compared to Middle Eastern alternatives, translating into billions in annual savings for the Indian economy.
The Modi administration has walked a diplomatic tightrope, simultaneously boosting purchases of American oil to placate Washington while maintaining its Russian energy ties. Trade data shows US oil imports to India grew by 23% in the same period, yet this expansion failed to offset the political damage caused by the Russian volumes. Indian refiners have also diversified their supplier base to include Brazil, Guyana, and African nations, though these remain marginal compared to the Russian share.
Economic Implications and Market Response
Financial markets reacted negatively to Trump’s comments, with the BSE Sensex dropping 342 points and the rupee weakening to 84.85 against the dollar in early trading. Export-oriented sectors, particularly textiles, pharmaceuticals, and engineering goods, faced selling pressure as investors priced in the risk of expanded US tariffs.
Trade experts warn that additional duties could derail the bilateral trade relationship, which reached $191 billion in 2024. The US Trade Representative’s office is reportedly reviewing India’s eligibility for generalized system of preferences benefits, a separate trade mechanism that could affect $6.3 billion worth of Indian exports.
Geopolitical Realignment Pressures
The dispute highlights India’s challenging position in the evolving global order. While Quad partnership commitments pull New Delhi closer to Washington’s strategic orbit, historical defense ties with Moscow and energy interdependence complicate this alignment. European diplomats have privately expressed support for the US position, with several EU ambassadors meeting Indian officials in December 2025 to discuss coordinated energy diversification.
India’s External Affairs Ministry has not issued a formal response to Trump’s latest statements, though sources indicate quiet diplomatic outreach is underway. The upcoming India-US Trade Policy Forum meeting, scheduled for February 2026 in New Delhi, now faces heightened stakes as both sides must decide whether compromise or confrontation will define the relationship.
