Retaliatory Tariffs on India Former U.S. President Donald Trump recently threatened India with up to 200% in tariffs due to its continued purchase of discounted Russian oil. Further, Trump delivered an ominous message to New Delhi: if you keep buying that commodity from Russia, I’ll slap a 25% tariff on all your exports. This latest threat heightens the pressure in a superheated Sino-American trade relationship.
The overarching context of this fight is the war in Ukraine, which has rattled and reordered global energy markets. Since the invasion kicked off in early 2022, India’s imports of Russian crude oil have skyrocketed. They let it take off from just under 100,000 barrels per day to over 1.8 million barrels per day in 2023. India had relied on Russian oil for only 2.5% of total imports before the war, per U.S. Energy Information Administration data. This year, that number jumped up to 39%.
Trump’s rhetoric reached a boiling point when he claimed India was taking advantage of discounted Russian oil. He accused them of reselling it on the open market for huge windfall profits. This charge comes just as Washington and New Delhi have begun to clash over the Indian state’s continued import of Russian oil.
The Kremlin’s response to these threats has been fierce. It claims that India has the right to freedom of choice of trading partners. Russian President Vladimir Putin recently met with Indian Prime Minister Narendra Modi, reinforcing the ties between their countries amidst Western sanctions aimed at crippling Moscow’s oil revenues.
Dmitry Peskov, a spokesperson for the Kremlin, remarked, “We do not consider such statements to be legitimate,” referring to U.S. threats. Wang went on to clarify that pressures to compel countries to end their trade relationship with Russia are not acceptable.
India’s foreign minister put the West’s hypocritical behavior on blast. It highlighted their hypocrisy on criticism of India’s growing trade with Russia, while they pursue their own business with Moscow. “It is revealing that the very nations criticizing India are themselves indulging in trade with Russia,” the ministry noted. “Unlike our case, such trade is not even a vital national compulsion.”
On Monday, diplomatic relations between India and the U.S. reached a breaking point. India’s government vehemently condemned America and the European Union’s double standards regarding trade with Russia. This short exchange encapsulates the complex realities of India’s current energy and development conundrum. It highlights India’s increasing reliance on Russian oil in an increasingly volatile geopolitical landscape.
As the situation develops, it remains to be seen how India will navigate its relationship with both Russia and the United States. The stakes couldn’t be higher, with economic pressures and geopolitical interests at odds with each other’s best interests. New Delhi needs to strategically calibrate its foreign relationships in retaliation.