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The President of the United States of America, Donald Trump, has warned that the US could impose higher tariffs on Indian goods if New Delhi does not address Russian oil concerns. He dropped the comment to reporters while flying on Air Force One.
Trump said, "They wanted to make me happy, basically." The US president claimed that, "PM Modi's a very good man. He is a good guy. He knew I was not happy. It was important to make me happy. They do trade with Russia and we can raise tariffs on them very quickly."
The US already hiked import tariffs on Indian products to 50% last year and it was looking to narrow its trade deficit with India as payback for India's big buys of Russian oil. Right now, the two countries are negotiating a possible US-India trade deal, though those talks have been fraught at times.
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Why Russian Oil Buys Are Stirring Trouble
India jumped into the top spot as the world's biggest buyer of cheap Russian seaborne crude after Russia invaded Ukraine in 2022. Those purchases have drawn fire from Western nations, including the US and the EU. They argue that the oil money keeps funding Moscow's war machine through energy revenues.
Even as other big economies have cut deals with Washington to dodge Trump's steep tariffs, India-US talks keep hitting difficulties. Talks between New Delhi and Washington have so far failed to produce an agreement. Negotiations fell apart in late July when India would not open its markets wider to US farm goods and pushed back on Trump's offer to mediate a short India-Pakistan clash. Trump responded by doubling tariff rates on Indian goods in August.
Ongoing Talks and Main Points
Trump and Modi still chat regularly and trade talks have picked back up. But India's Russian oil purchases remain the biggest hurdle in US-India trade negotiations.
Trump claimed back in October that Modi promised to halt Russian oil imports. India, though, has stood firm publicly. Officials say that the discounted barrels are essential for the country's energy security because of global supply concerns.
Tighter sanctions from the US and EU are affecting the situation. In December, Russian oil shipments to India dropped to about 1.2 million barrels per day (bpd), the lowest level in three years, according to Kpler data and industry sources. This amount is down around 40% from the peak of roughly 2 million bpd in June.
As Trump pushes harder, watch for how this plays out in the next round of US-India trade deal talks. Could more tariffs be on the horizon, or will Modi find a way to balance energy needs with Washington's demands?
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