The United States is intensifying efforts to persuade India to stop buying Russian oil, as tariffs and geopolitical tensions threaten to reshape the strategic partnership amid ongoing trade and energy disagreements.
Sergio Gor, President Donald Trump’s nominee for the next U.S. Ambassador to India, has reaffirmed that the Trump administration is resolute in its stance that India must cease purchasing Russian oil. Speaking to the Senate Foreign Relations Committee, Gor emphasised that President Trump has made this position “crystal clear,” linking India’s continued trade in Russian oil to tensions in broader U.S.-India relations. The move comes amid escalating trade disputes, with the U.S. having already imposed steep tariffs — currently as high as 50% — on Indian imports, a punitive measure aimed at pressuring India to align with Western sanctions against Russia in the ongoing Ukraine conflict.
Relations between the two countries have been strained, notably after talks aimed at reducing tariffs collapsed due to India’s resistance to opening critical sectors such as agriculture and dairy. Bilateral trade between the U.S. and India exceeds $190 billion annually, underlining the high stakes at play. While Gor expressed optimism that these tariff disputes are “not that far apart” from resolution and predicted progress “in the next few weeks,” the underlying issues remain complex, driven in part by India’s strategic balancing act amid shifting geopolitical alliances.
The situation is further complicated by India’s prominent role within the BRICS coalition, a bloc originally composed of Brazil, Russia, India, China, and South Africa, which has expanded in 2024 to include Egypt, Ethiopia, Iran, and the UAE, with Indonesia set to join in 2025. India has often acted as a moderating influence within BRICS, especially concerning moves to reduce reliance on the U.S. dollar, which the U.S. views with concern. Gor noted that India has been a “stopgap” preventing BRICS economies from moving entirely away from dollar-based trade, reflecting India’s unique position of being more open to engagement with the U.S. than other BRICS members.
This diplomatic friction over energy trade is not confined to tariffs alone. According to reports from the Financial Times and Reuters, the U.S. intends to urge its G7 allies to impose high tariffs—potentially up to 100%—on China and India for continuing to purchase Russian oil, framing it as a means to choke off revenue vital to Russia’s war efforts in Ukraine. The U.S. strategy to pressure these nations involves coordinated economic penalties during upcoming G7 finance minister discussions. However, European Union members have shown hesitance, partly due to their economic interests and fractured consensus within the bloc, with some nations continuing Russian oil imports. The EU instead favours alternative sanctions measures and seeks to increase American liquified natural gas supplies to replace Russian energy.
In contrast, Indian officials have stood firm. Finance Minister Nirmala Sitharaman confirmed that India will persist in importing Russian oil, emphasizing economic pragmatism and the need to stabilize global energy markets. India has emerged as the largest importer of Russian seaborne crude, arguing that decisions are based on national interests rather than geopolitical alignment. This stance has led to diplomatic strains, with senior U.S. officials such as Commerce Secretary Howard Lutnick underscoring that resolution of trade talks hinges on India ceasing Russian oil purchases. Lutnick remains hopeful for imminent trade agreements but draws a clear connection between energy policy and broader trade relations.
The persistent tariffs have economic consequences for India as well. The country’s Chief Economic Adviser, V. Anantha Nageswaran, warned that the high tariffs could shave 0.5 to 0.6 percentage points off India’s GDP for the fiscal year, noting the risk to Indian exports, almost half of which could be affected by U.S. tariffs. The Indian government, however, remains confident in its growth trajectory, buoyed by a strong 7.8% expansion in the April-June 2025 quarter and forecasting 6.3-6.8% growth for the coming year despite these headwinds.
Further complicating the matter, political commentators such as Peter Navarro have criticised India’s geopolitical positioning, citing its ongoing border conflicts with China and the growing presence of Chinese naval forces in the Indian Ocean. Navarro’s sharp rhetoric frames the BRICS nations as economically parasitic when trading with the U.S., intensifying the broader narrative of economic and security rivalry.
On a multilateral front, India continues to engage actively, with External Affairs Minister S. Jaishankar speaking at the virtual BRICS Leaders’ Summit, highlighting the importance of stabilising the international economy and addressing the developmental and supply chain disruptions caused by ongoing conflicts.
In summary, the U.S.-India relationship is at a crossroads defined by strategic, economic, and geopolitical tensions. While the Trump administration exerts strong pressure on India to abandon Russian oil imports through tariffs and diplomatic channels, India prioritises economic and energy security considerations. Both sides appear keen to resolve tariff disputes, but fundamental disagreements over energy trade and alliance dynamics introduce ongoing complexity to this significant bilateral relationship.
Source: Noah Wire Services
