New Delhi calls the 50% duties “unfair and unjustified” as Trump threatens secondary sanctions amid deepening energy standoff
The trade standoff between Washington and New Delhi took a dramatic turn this week as U.S. President Donald Trump announced sweeping new tariffs on Indian goods, citing India’s continued imports of Russian oil. The decision, which slaps an additional 25% duty on top of existing tariffs, effectively doubles the rates for a broad swath of Indian exports — from textiles to electronics — triggering immediate diplomatic backlash.
India, in no uncertain terms, called the move “unfair, unjustified and unreasonable,” and accused the U.S. of hypocrisy over its own energy interests. The Foreign Ministry, in a sharply worded statement, said India’s purchase of Russian crude had previously been encouraged by Washington as a way to keep global markets stable during the Ukraine war.
Now, with a full-blown tariff war looming, all eyes are on what India does next — and whether the two countries’ carefully managed economic partnership can weather the storm.
Trump warns of secondary sanctions, doubles down on pressure
The White House made no effort to soften the blow. In a press conference late Wednesday, President Trump linked the tariff escalation directly to India’s refusal to scale down energy purchases from Russia — even as European nations continue to buy gas through intermediaries.
“India can’t have it both ways,” Trump said, addressing reporters from the South Lawn. “You don’t get a free pass for funding Putin’s war machine and then expect open access to our markets. If we need to go further, we will.”
He didn’t stop there.
Trump also warned of “potential secondary sanctions” targeting Indian refiners or companies that facilitate payments for Russian crude — a clear escalation that could send shockwaves through the financial sector.
One sentence pause. That’s all it takes to raise the stakes.
Though the administration hasn’t formally triggered such measures yet, U.S. officials say the legal groundwork is already in place.
India refuses to budge — and lashes out
New Delhi’s response was swift and unusually blunt.
A top-level source in India’s External Affairs Ministry, speaking anonymously due to the sensitivity of the matter, said Trump’s threats “undermine the credibility of prior U.S. commitments” made during the early stages of the Ukraine war, when Washington “explicitly supported diversified energy procurement strategies” to blunt Russia’s leverage over Europe.
Publicly, the Foreign Ministry said India was simply doing what was necessary.
“India began importing oil from Russia after traditional supplies were diverted to Europe, not out of political preference,” said spokesperson Raghav Bansal. “The U.S. actively encouraged these imports as a stabilizing measure. It’s disturbing to see that narrative reversed so sharply.”
This rhetorical shift suggests India is not in the mood to compromise, at least not under pressure.
What’s at stake for Indian exports?
The 25% tariff hike, set to take effect in three weeks, adds to an existing 25% duty already imposed on select Indian goods. That means some product categories will now face total tariffs of up to 50% — a severe blow to sectors like garments, consumer electronics, auto parts, and some agriculture-based exports.
Exemptions remain for now on:
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Pharmaceuticals
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Semiconductor-related components
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Steel and aluminum (already under separate sectoral duties)
Still, Indian exporters are bracing for impact. Federation of Indian Export Organisations (FIEO) President A. Sakthivel said the tariffs could wipe out margins for mid-sized manufacturers who were just beginning to recover from pandemic-era disruptions.
“There’s no way we can stay competitive in the U.S. market at that duty level,” he said. “It’s like handing the market to Vietnam or Mexico.”
Data paints a complex picture
Indian oil imports from Russia have soared since 2022, turning Moscow into New Delhi’s largest crude supplier by volume.
Here’s a quick breakdown of India’s oil sourcing, by country:
| Country | Share of India’s Oil Imports (Q2 2025) |
|---|---|
| Russia | 32% |
| Iraq | 18% |
| Saudi Arabia | 15% |
| UAE | 11% |
| U.S. | 9% |
And here’s where Indian exports to the U.S. stand:
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Total value (2024): $94.3 billion
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Top categories: Pharmaceuticals, textiles, jewelry, auto parts
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Sectors most exposed to tariffs: Apparel, electronics, furniture
One-liner to breathe.
It’s a sizable chunk of India’s economy — and Washington knows it.
Strategic ties now caught in the crossfire
Beyond trade, the tariff war risks upending a broader diplomatic relationship that both countries have spent years building. Defense cooperation, tech investments, supply chain realignments — all are part of a growing U.S.-India alignment seen as vital to countering China.
But the tariffs, and the tone surrounding them, could dent that momentum.
Former Indian Ambassador to the U.S. Nirupama Rao told WUGA the move “blindsided” key diplomatic channels. “This was not just a policy shift — it was a political escalation,” she said.
The message, Rao argued, will not be lost on other U.S. partners — especially those in the Global South who have similarly chosen to maintain commercial ties with Russia.
No talks scheduled, for now
Despite the noise, no official talks have been announced between the two governments to resolve the issue. India is expected to raise the matter at upcoming G20 and BRICS energy and trade forums. But for now, direct de-escalation seems unlikely.
A senior U.S. trade official told Bloomberg off-record that “Trump’s tariff posture is part of a broader strategic hardening” and is unlikely to change unless India adjusts its oil sourcing behavior significantly.
Until then, businesses on both sides are stuck in limbo, weighing costs, rerouting supply chains, and trying to figure out how long the standoff will last.
