By Francesco Stipo
Thursday, 02 October 2025 03:34 PM EDT
In August, the Trump administration raised U.S. tariffs on India’s goods to 50%, intensifying tensions between the two nations. India has become increasingly reliant on Russian crude oil, sourcing nearly 40% of its imports from Moscow since the start of the war in Ukraine. This shift has allowed India to capitalize on Russia’s discounted prices, bypassing Western sanctions and generating significant revenue that indirectly supports Russian military operations.
Before the conflict in Ukraine, India primarily imported crude oil from Iraq and Saudi Arabia. However, after the war began, its reliance on Russian oil surged from 0.2% to nearly 40%, making Russia the country’s top energy supplier. Indian refineries have since profited immensely by exporting petroleum products to Europe and Africa at high margins.
President Trump has long advocated for a peace deal between Russia and Ukraine, arguing that India’s continued trade with Moscow undermines global efforts to end the conflict. Critics have accused him of favoring Russian President Vladimir Putin, but the tariffs on Indian goods suggest otherwise. By targeting Russia’s key revenue streams, Trump aims to pressure Moscow into accepting a fair resolution to the war.
India faces a critical decision: either reduce its oil imports from Russia and align with Western economic priorities or risk long-term economic stagnation. With its population surpassing China’s and projected economic growth outpacing the nation’s neighbor, India cannot sustain this trajectory without closer ties to the West. The U.S. remains a major market for Indian exports, which totaled nearly $80 billion in 2024, while remittances from Indian workers abroad also play a vital role in the economy.
New restrictions on H1B visas threaten this balance, potentially reducing India’s income from skilled labor migration. Meanwhile, Russia’s oil discounts have declined, making U.S. crude and liquefied natural gas more competitive as an energy alternative. Diversifying India’s oil sources could lower tariffs, boost trade, and align the country with global economic trends.
For Prime Minister Narendra Modi, the choice is clear: prioritize short-term economic gains by maintaining ties with Russia or secure long-term prosperity by embracing Western partnerships. The path chosen will shape India’s role on the world stage for years to come.
