U.S. criticizes India’s purchase of Oil from Russia as trade tensions rise

A split has emerged in the U.S.- India relations over India’s continued import of Russian oil. U.S. Secretary of State Marco Rubio warned that these oil purchases are “most certainly a point of irritation” in ties between the two countries, despite describing India as a strategic partner.

Rubio recognised India’s legitimate need for affordable energy, considering that it relies on Russian oil because it is discounted under international sanctions. However, he expressed concern that these purchases indirectly support Russia’s military efforts in Ukraine.The remarks were made just a day after former US President Donald Trump declared that a 25 percent tax would be imposed on Indian exports starting on August 1. Trump also mentioned further penalties related to India’s energy and commerce relations with Russia.

Trump criticized India for “obnoxious non-monetary trade barriers” and high domestic tariffs, saying that India’s oil purchases from Russia were “ALL THINGS NOT GOOD.” He also demanded that a tax plus penalty be imposed starting on August 1.

In response, the Indian government reassured its commitment to a fair and balanced trade agreement with the United States and promised to do everything in its power to safeguard its interests as a nation and assist small companies, farmers, and industries.

Analysts describe Trump’s moves including threats of secondary tariffs on countries buying Russian energy as a strategic effort to pressurize India to rethink its partnership with Russia and accelerate U.S.- India trade negotiations.

What this means:

• India perceives Russia as a long-standing defense and energy partner, and uses discounted oil to fulfill its expanding energy needs.
  

• The U.S. response reflects frustration, linking India’s energy choices to Russia’s conflict in Ukraine.
  

• With India defying U.S. pressure and maintaining its position on strategic autonomy, trade negotiations are in trouble.