Aug 6, 2025 12:18 IST
First published on: Aug 6, 2025 at 12:18 IST
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As India and the United States failed to clinch a trade deal by the stipulated deadline, President Donald Trump announced on his social media post that all imports from India would now be subject to a 25 per cent tariff, and an additional penalty for importing Russian energy. While a higher tariff across the board was expected if the deal fails, the additional penalty for trading with Russia has irked the Indian establishment. The MEA issued a statement criticising the US and the EU by exposing their own hypocrisy on the issue of doing business with Russia.
It is true that India’s energy imports, mostly crude oil, from Russia have increased. But Russia’s emergence as India’s major supplier of crude oil is a consequence of US policy itself. To begin with, US sanctions on Venezuelan crude oil continue to be in force, blocking off a major source of supply. This is significant because Venezuela holds the world’s largest reserves of crude oil. A fear of secondary sanctions has prevented the world from importing from Venezuela. Then, in 2019, the US, during the first Trump presidency, imposed sanctions on Iranian oil after it pulled out of the JCPOA. Iran was one of India’s major oil suppliers, but the threat of secondary sanctions forced it to immediately cut its imports from Iran to 0.76 per cent of its total oil imports by 2020. Today, the share has fallen below 0.04 per cent.
Finally, after Russia invaded Ukraine in February 2022, the EU, which felt morally compelled to reduce its energy dependence on Russia, undertook measures to gradually phase out Russian coal and oil imports. The EU’s decision to transition from traditional suppliers to new ones threatened to drive up global oil prices. To further worsen the situation, OPEC’s practice of capping output to create artificial scarcity threatened to trigger inflationary pressures worldwide. And even then, Russian oil was not under any direct sanctions, like Iran or Venezuela. While the G7 placed a price cap on Russian oil, which they were able to enforce globally, India didn’t violate any understanding. And thus, Trump’s sudden frustration with India’s trade with Russia is bizarre.
Moreover, while Trump has singled out India, alongside China, he chose to conveniently absolve the EU for the same. For all its moral chest-thumping, the EU has only been successful in cutting its coal dependence on Russia. It continues to import crude oil from Russia even as imports have reduced substantially. But most importantly, the EU has not stopped importing Russian gas, LNG and pipeline gas. In fact, it continues to be Russia’s top export destination for both LNG (51 per cent) and pipeline gas (37 per cent). Additionally, after Russia’s invasion of Ukraine, India emerged as the top supplier of refined oil to the EU, overtaking Saudi Arabia. The EU had no problems until very recently in importing Russian crude oil refined in India.
Trump’s actions appear, more than anything else, to be a result of his frustration and exasperation in dealing with Russia, India, and China. That he doesn’t care about Ukraine or the Ukrainian cause is quite evident. However, it is no secret that when Trump assumed the presidency earlier this year, he made some tall claims regarding Russia, China and India. He vowed to bring the Russian war on Ukraine to an end. He also expressed confidence in concluding a favourable trade deal with both India and China. Trump expressed his admiration for the three leaders of all three countries. He was hoping to bank on his personal working relationship with them to deliver on these promises.
Yet, more than six months after Trump took office, Putin has shrugged off repeated deadlines set by Trump to end the war. Xi Jinping, too, has refused to buckle under pressure and instead coerced Trump into agreeing to a 90-day truce amidst the ongoing tariff war between the US and China. Finally, India’s decision to refute Trump’s claim of mediating a ceasefire with Pakistan and its refusal to compromise on some core issues during the trade talks seems to have further infuriated the US president. Trump’s decision, therefore, to sanction Russian crude oil, all of a sudden, is an expression of his disappointment arising from the mismatch between his expectations and reality.
The writer is with Takshashila’s Indo-Pacific Studies programme
