MUMBAI, India — India's prime minister responded with defiance after President Trump threatened to double tariffs on his country to 50%, because it purchases Russian oil.
Trump accuses India of undermining American efforts to counter Russia's invasion of Ukraine.
"India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits," he posted on Truth Social earlier this week.
If Trump goes through with his threat, the new rate would go into effect on Aug. 27 and make India one of the most heavily tariffed trading partners of the U.S., alongside Brazil.
On Wednesday, Indian Prime Minister Narendra Modi told loyalists that he would not be cowed.
"I know that I will personally have to pay a heavy price for it," he said. "But I am ready for it."
India ramped up its purchases of Russian oil after Moscow offered it at a discount after invading Ukraine three years ago. In 2024, India bought Russian oil worth more than US $47 billion, according to the Finnish think tank Centre for Research on Energy and Clean Air. Nearly a third of India's total oil imports come from Russia.
Indian analysts were quick to note that other major importers of Russian oil, China and Turkey, had not faced any additional punitive tariffs. Indian officials have accused the U.S. of double standards for continuing to trade with Russia, while it punishes other countries for doing so.
On Wednesday, a spokesman for the ministry of external affairs, equivalent to the department of state, described Trump's latest order as "unfair and unreasonable." The U.S. purchased more than $3 billion of goods and services from Russia last year, although it has been declining in recent years.
Deep economic ties
Bilateral trade between India and the U.S. is more than $150 billion.
Some of India's exports to the U.S. remain, so far, exempt from tariffs, including pharmaceuticals and electronics. But other industries may be badly hit by the tariffs, including exports of gemstones, seafood and textiles.
The 50% tariff would affect tens of thousands of workers and potentially shave billions off India's earnings, says Anupam Manur, professor of economics at The Takshashila Institution, a Bengaluru-based think tank and public policy school.
"This comes at a time India desperately needs to create more jobs," he says.
India insists its Russian oil imports provide economic security, and has long bristled over Western pressure to distance itself from Russia, with whom India enjoys a decades-old relationship. But India's assertiveness in public, Manur says, hasn't stopped the country from heeding to U.S. demands in the past.
He points to Trump's first presidency in 2019, when the U.S. asked countries to stop oil imports from Iran after imposing sanctions on Tehran over its nuclear program.
"At the time too, we made statements saying that India's energy security comes first. Gradually, we stopped buying oil from Iran," Manur says.
According to data from Helsinki-based think tank Centre for Research on Energy and Clean Air, some Indian state-owned refineries stopped procuring from Russia in early July, just around the time Trump warned India of "secondary tariffs" unless it stopped sourcing oil from Russia.
Manur says the U.S. might be using India's vulnerability as a bargaining chip in its ongoing trade negotiations.
A shift in relations
Since the 1990s, America's bipartisan foreign policy has been to draw closer to India, as an economic and political bulwark against China.
During Trump's first administration, he embraced Modi as a key ally. The two leaders held rallies for each other in their respective countries and cultivated a personal relationship.
But the relationship between the two leaders and nations is unravelling.
Since February, India and the U.S. have had five rounds of trade talks. Yet, a major difference remains unresolved: U.S. officials want its agriculture and dairy products to be sold in India. That is a politically explosive demand for India, where millions of workers are engaged in agriculture.
Indian analysts also say that Trump is annoyed by Modi's refusal to acknowledge Trump's role after the president claimed he arranged a ceasefire between India and Pakistan after the two countries fought in May for six days.
India insists its military prowess forced Pakistan into that ceasefire. Pakistan, on the other hand, has profusely thanked Trump, and even offered to nominate him for a Nobel Peace Prize.
What Trump may really want from India is a thank you, says Milan Vaishnav, director of the South Asia Program at the Carnegie Endowment for International Peace.
"Until and unless there's a public endorsement of Trump's role, it's going to be very hard to get past this stage," he says.
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