US President Donald Trump has sparked a fresh controversy by threatening to slap “very substantial” tariffs on Indian imports within 24 hours. The reason? India’s continued purchase of Russian oil, which Trump claims is “fuelling the war machine” in Ukraine. This bold move has stirred tensions between the two nations, raising concerns about its impact on India’s economy and global trade. In this article, we dive into the details of Trump’s threat, India’s response, and what it means for the world. Stay updated with AMERICA NEWS WORLD for the latest insights.
Trump’s Tariff Threat: What’s Happening?
On August 5, 2025, Trump announced his plan to raise tariffs on Indian goods significantly. Speaking to CNBC, he said, “India has not been a good trading partner. They do a lot of business with us, but we don’t do business with them. So we settled on 25 percent, but I’m going to raise that very substantially over the next 24 hours because they’re buying Russian oil.” This statement follows his earlier comments accusing India of profiting by reselling Russian oil on the open market.
The trade dispute began on July 31, when Trump imposed a 25% tariff on Indian goods, citing India’s high tariffs on US products and its energy trade with Russia. Now, with the threat of an even higher tariff, the situation is heating up. Trump’s frustration stems from India’s role as one of the largest buyers of Russian oil, especially after Western sanctions disrupted global energy markets following Russia’s invasion of Ukraine in 2022.
India’s Strong Response
India didn’t hold back in its rebuttal. The Ministry of External Affairs (MEA) called Trump’s accusations “unjustified and unreasonable.” In a statement, the MEA pointed out that India’s oil imports are driven by the need to ensure affordable energy for its citizens, a necessity caused by global market shifts. They also highlighted the hypocrisy of Western nations, noting that the European Union conducted €67.5 billion in trade with Russia in 2024, including 16.5 million metric tons of liquefied natural gas (LNG). The US itself imports Russian uranium, palladium, and fertilizers, the ministry added.
“While India’s imports are a necessity, the nations criticizing us are indulging in trade with Russia without such compulsion,” the MEA stated. India vowed to take all necessary steps to protect its economic interests, signaling a firm stance against US pressure.
Why Russian Oil Matters
India’s reliance on Russian oil has grown since the Ukraine conflict began. Russia supplies about 35% of India’s crude oil, making it the country’s top supplier. This shift happened as traditional suppliers redirected oil to Europe, leaving India to seek affordable alternatives. According to trade analysts, India’s purchases have helped stabilize global oil prices, preventing a price shock that could have hurt economies worldwide.
However, Trump’s narrative paints India’s actions as supporting Russia’s war efforts. He argues that by buying and reselling Russian oil, India is indirectly funding the conflict in Ukraine. This claim has drawn sharp criticism from Indian officials, who argue that their trade decisions are transparent and economically driven.
Economic Impact on India
The proposed tariff hike could hit Indian exporters hard. Key sectors like textiles, engineering, seafood, chemicals, and leather may face challenges in the US market. Government sources told AMERICA NEWS WORLD that the economic impact might be minimal, with a GDP loss of less than 0.2%. Still, the threat has raised concerns among Indian businesses and policymakers.
Here’s a breakdown of India’s top exports to the US and their potential vulnerability to tariffs:
| Export Category | Share of Exports to US | Potential Tariff Impact |
|---|---|---|
| Textiles | 30% | High |
| Engineering Goods | 25% | Moderate |
| Chemicals | 15% | Moderate |
| Seafood | 10% | High |
| Leather Products | 8% | High |
Chart: Impact of US Tariffs on Indian Exports
Grok can make mistakes. Always check original sources.
Global Reactions and Russia’s Support
Russia has backed India’s position, with Kremlin spokesman Dmitry Peskov stating, “Sovereign countries have the right to choose their trade partners.” Russia criticized the US for trying to dictate trade policies, calling such threats “illegal.” This support comes as India’s National Security Adviser Ajit Doval visits Moscow to strengthen bilateral ties, a move that underscores India’s commitment to its strategic partnership with Russia.
What’s Next for US-India Relations?
The tariff threat has strained US-India relations, which seemed on track for a trade deal earlier this year. During Prime Minister Narendra Modi’s recent US visit, both nations aimed to double bilateral trade to $500 billion by 2030. However, Trump’s focus on India’s high tariffs and Russian oil purchases has stalled negotiations. India’s offer of zero tariffs on US goods was dismissed by Trump as “not good enough.”
For now, India is standing firm, prioritizing its energy needs and economic security. The coming days will be crucial as both sides navigate this trade rift. Will Trump follow through with the tariff hike, or is this a negotiation tactic? Only time will tell.
Why This Matters to You
This trade dispute affects more than just India and the US. Global markets, energy prices, and supply chains could feel the ripple effects. For readers in India, the tariff threat raises questions about economic stability and job security in export-driven industries. For those in the US, it highlights the complexities of international trade and geopolitics. Stay informed with AMERICA NEWS WORLD for real-time updates on this developing story.
Image: US-India Trade Tensions
Source: Unsplash
For more details on global trade dynamics, check out Reuters for comprehensive