How Trump’s Tariffs on India Over Russian Crude Could Hurt European Union

Even as trade tensions intensified between India and the US over the last 24 hours, President Donald Trump’s latest threat seems unlikely to discourage New Delhi from continuing trade with Russia.

Late on Monday, Trump threatened India with hefty additional tariffs over its energy purchases from Russia, accusing New Delhi of funding Russia’s invasion of Ukraine by buying oil. This comes after Trump had already imposed 25% tariffs on India in a bid to balance the trade deficit.

Issuing a strongly worded statement, India’s Ministry of External Affairs (MEA) said, “The targeting of India is unjustified and unreasonable.”

The MEA also called out the European Union and the US for continuing trade with Russia, emphasizing that India began importing oil from Russia only after its ‘traditional supplies’ were diverted to Europe following the Russia-Ukraine war in 2022.

The statement further read, “The United States at that time actively encouraged such imports by India for strengthening global energy market stability.”

While asserting that India, like any major economy, will take all necessary measures to safeguard its national interests and economic security, the MEA’s statement signals that the country is unlikely to halt oil imports from Russia as long as no cheaper alternatives are available.

It is understood that the central government is committed to prioritizing consumer interests and opting for the most viable energy sources. Reports also suggest that India may explore further discounts from Moscow in light of Trump’s threat. National Security Adviser Ajit Doval’s visit to Russia, beginning Tuesday (August 5), is expected to bring more clarity on the issue.

Interestingly, India’s imports of cheaper crude from Russia have also benefited European countries, which are major buyers of diesel and jet fuel.

According to reports, India has rapidly emerged as a key supplier of refined petroleum products to the EU, stepping up after Europe banned direct imports of Russian diesel in early 2023.

Fuel exports from India to the EU rose approximately 58% year-on-year in the first three quarters of 2024, largely driven by Indian refiners processing discounted Russian crude and exporting diesel and jet fuel to Europe.

Before the Russia-Ukraine war, Europe imported about 154,000 barrels per day (bpd) of diesel and jet fuel from India. This figure rose to over 360,000 bpd in 2023–2024, making India the largest supplier of refined fuel to Europe—surpassing even Saudi Arabia.

Meanwhile, Trump’s latest threat has also triggered anxiety among American buyers currently in talks with Indian exporters to place orders ahead of the busy Christmas season.

It is widely believed that Trump’s warning may be in retaliation for India’s opposition to claims that the US President brokered peace between India and Pakistan following Operation Sindoor. The development also comes in the backdrop of New Delhi refusing the dumping of genetically modified corn and soybean in Indian markets to protect the interests of local farmers.

It remains to be seen how the Trump administration will respond to India’s latest statement on tariffs. These developments could potentially influence the trajectory of ongoing bilateral trade talks between India and the US.