Indeed, India is in a bind. The United States has slapped an extreme 25% duty on Indian exports and tacked on an unnamed punitive measure as well. President Donald Trump has recently slapped tariffs specifically on India’s imports of oil and military hardware from Russia. In part, it was this decision that drove the relocation. The unfortunate result of this development has put India in the middle of challenging U.S.–Russian trade talks.
The U.S. is reportedly concerned that India is sharply increasing its imports of Russian oil. These imports have increased from almost 100,000 barrels per day before the invasion of Ukraine to more than 1.8 million barrels per day in 2023. India is pressing ahead with diversifying sources of oil. This triple jump in demand comes on the heels of having diverted normal supplies to Europe as a result of the Russia-Ukraine war.
India’s Energy Minister, Hardeep Singh Puri, defended the country’s oil purchases from Russia, asserting that they played a crucial role in stabilizing global energy prices. He doubled down on his call for countries to have stopped their Russian oil imports already, in earlier months. Otherwise, oil prices would have had to skyrocket to $130 a barrel.
“If people or countries had stopped buying at that stage, the price of oil would have gone up to 130 dollars a barrel. That was a situation in which we were advised, including by our friends in the United States, to please buy Russian oil, but within the price cap.” – Hardeep Singh Puri
India’s foreign ministry pointed out that the U.S. had been consistently promoting this kind of imports in improving global energy market stability. The ministry stated, “The United States at that time actively encouraged such imports by India for strengthening global energy markets stability.”
India balances bilateral relations and U.S. trade restrictions Although the U.S. has severely restricted trade with Russia, India’s bilateral relations remain strong on both sides. Importantly, India sources uranium hexafluoride for its nuclear industry and palladium for its electric vehicle industry from the United States. Moreover, agricultural fertilisers and pesticide products make up a large part of this trade relationship.
Bilateral trade between India and Russia reached an all-time high of $68.7 billion for the year ending March 2025. This extraordinary number represents an almost 5.8-fold increase from the $10.1 billion level before the pandemic hit. Today, U.S.-Russia trade has tanked by nearly two-thirds. It’s gone down from almost $36 billion in 2021 to just $5.2 billion in 2024.
India has openly criticized the U.S. for its continued trade with Russia despite imposing sanctions, asserting that it will not compromise its national interests or economic security.
“Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.” – India’s foreign ministry
The changing contours of global trade between these two powers underscores the strategic importance of India, as it treads a delicate middle path between them. The U.S.’s aggressive stance on tariffs and penalties reflects its broader geopolitical strategy, while India’s increasing reliance on Russian oil underscores its need for energy security amid fluctuating global markets.
Rachel Ziemba, a leading expert on economic and geopolitical issues, noted that it was the last U.S. administration that first set up the price cap architecture. This decision unexpectedly created a change in trade patterns. She further stressed that these breakthroughs muddy the conversation around the world’s energy supply chains.
“It was the last U.S. administration that put in place the price cap system, which facilitated the redirection of trade.” – Rachel Ziemba
As India continues to bolster its economic ties with Russia while facing U.S. tariffs, it remains to be seen how this complex situation will unfold in the coming months. The consequential balancing act of providing domestic energy security with political desperate to strengthen international trade relations is an imposing challenge for Indian policymakers.