India's Dilemma: Navigating US Tariffs on Russian Oil

The Indian government is poring over the fine print of Washington’s latest tariff move on buyers of Russian oil, Commerce Minister Piyush Goyal said on Monday, as a new US law threatens to reopen a fraught chapter in India–US trade ties.

The sanctions and tariffs package, passed in Washington days ago, gives US President Donald Trump the power to slap punitive duties of up to 100% on countries that keep leaning on Russian energy — a list that includes India and China. For New Delhi, which has turned Russian crude into a discount lifeline since the start of the Ukraine war, the message is blunt: keep buying, and pay a price.

India caught between Moscow and Washington

India’s partnership with Russia has deepened through the conflict in Ukraine, anchored in a surge of cut‑price oil imports that have helped cushion domestic inflation and support growth. The same story has soured the mood in Washington.

Under Prime Minister Narendra Modi, India–US relations have hit repeated turbulence over those Russian barrels. Last August, Trump hiked tariffs on Indian imports by an extra 25% in response to the oil purchases, on top of an existing 25% reciprocal duty. Indian exporters suddenly faced a 50% wall into one of their most important markets.

The pressure worked, at least on paper. In February 2026, the Russia‑linked surcharge was scrapped and the reciprocal tariff trimmed to 18% as part of a broader US–India trade framework. That deal was sold as a breakthrough, a pathway to a more stable economic partnership.

It has since stalled.

The landmark agreement remains stuck in limbo, with no major progress and no clear timeline. Trade experts now see the fresh tariff threat as another lever in Washington’s negotiating kit, a reminder that the White House can still tighten the screws if New Delhi does not bend on market access, digital rules, or strategic alignment.

Tariffs as leverage

For India, the calculus is harsh. Russian crude has become central to its energy security and to keeping pump prices politically manageable. But every additional tanker from Russia risks inviting another volley of tariffs from the US.

Analysts argue that Washington is unlikely to abandon that leverage. The prospect of duties of up to 100% on Indian goods is a powerful bargaining chip in any future talks, especially with the earlier framework agreement drifting.

The next move now sits with New Delhi. Study the details, as Goyal says, or brace for another round of tariff brinkmanship with a partner it cannot afford to alienate — even as it leans ever harder on a supplier it cannot easily replace.