Trump, whose actions are regularly driven by his (often mistaken) perceptions of weakness in other parties, has decided to have a go at India over its purchases of Russian oil. The fact that so far, India is the only country singled out for this treatment suggests that Trump thinks he is engaging in “Kill the chicken to scare the monkey” behavior, that by punishing India, he can get others to fall into line without implementing additional secondary sanctions. Many experts have pointed out, much like the shock and awe sanctions that the Collective West imposed on Russia, that imposition of secondary sanctions on major trade partners, particularly China, have good odds of damaging the US more than the target.
India appears to have no intent of backing down. Keep in mind that even though India does not export Russian crude (India does not export oil at all), it is widely believed to export products from refined from Russian oil, particularly to Europe. However, as we’ll discuss, the Trump plan is putting pressure on some unresolved issues in Indian-Russian oil trade, beyond the fact that India will seek a further discount on its energy buys beyond the one it is getting now. A new interview of John Helmer by Dimitri Lascaris gives considerable insight into the India reaction and likely next steps.
First, an overview of the Trump threat from Bloomberg:
President Donald Trump said he would be “substantially raising” the tariff on Indian exports to the US over New Delhi’s purchases of Russian oil, ramping up his threat to target a major trading partner…
Trump’s post did not specify how much he would raise the levy by. Trump last week announced a 25% rate on Indian exports, shocking New Delhi after months of negotiations failed to secure a breakthrough. He also threatened more action if India continued to buy oil from Russia…
India has been a top Trump target in the campaign to bring an end to the war in Ukraine. New Delhi has been defiant, however, with Prime Minister Narendra Modi — who has had warm relations with Trump in the past — responding to the US president’s threat by urging Indians to buy local goods and signaling that his administration will continue to buy Russian oil.
Modi’s government hasn’t given Indian oil refiners instructions to stop buying Russian oil, and no decision has been taken on whether to halt the purchases, people familiar with the situation told Bloomberg
Trump may have been advised that India was vulnerable to US pressure due to the US being India’s largest trade partner. However, China and the UAE rank as more important export destinations than the US, reducing American leverage. From the World Bank:
An OilPrice story published after the Trump hissy headlined that India Continues Russian Oil Imports Despite U.S. Sanctions. It did say there had been a pause in deliveries.
India’s formal response was polite and logical, not that that matters to Trump.1 A cornerstone of their case was that energy supplies had been diverted to Europe after the Special Military Operation started and noting a bait and switch. Per the Financial Times:
Randhir Jaiswal, spokesperson for India’s foreign ministry, said in response to Trump’s Truth post: “The targeting of India is unjustified and unreasonable…
“The United States at that time actively encouraged such imports for strengthening global energy markets stability.”
The pink paper also noted:
Last year, Russia supplied India with one-third of its crude oil imports, or about 550mn barrels. The US, by contrast, sent just 52mn barrels during that period, according to data from data provider LSEG.
The EU seems to believe that it is loaded for bear. From Politico’s morning European newsletter:
PUNISHING CHINA AND INDIA: Patience is running thin with China and India as the world’s most populous countries continue to fuel the Russian economy/war machine.
Throwback Tuesday: Both Brussels and Washington appear to be moving in the same direction, plotting sanctions against Beijing and Delhi…It’s a whiff of old-school Western alignment that feels downright retro.
TRUMP ADDS INJURY TO INDIA: After failing to reach a trade deal with Delhi, Trump is claiming moral authority to dish out even steeper duties….
EU SANCTIONS COMING FOR BEIJING: Separately, Brussels is preparing to push for sanctions against China over its involvement in supporting Russia’s war on Ukraine….
Context: The move follows a July Reuters report that Chinese-made drone engines have been covertly shipped to Russia via front companies, labeled as “industrial refrigeration units” to evade Western sanctions.
Escalating involvement: The exposé triggered alarm in Brussels. Fifteen EU countries have confronted Beijing about the shipments, but China has either denied involvement or refused to respond. “The report is accurate and it shows China is escalating its role, both quantitatively and qualitatively,” the diplomat said. “It’s fair to say that without Chinese support, the war would look very different right now.”
What’s next: According to the diplomat, the EU has been aware of Chinese drone transfers to Russia since before reports surfaced. “After August, we’ll push for sanctions,” the diplomat said, warning that the bloc shouldn’t underestimate its economic leverage. “We want dialogue, but also action.”
ABOUT THAT ECONOMIC LEVERAGE … Chinese tech giant Baidu and Lyft, an American ride-hailing service, are teaming up and plan to start operating Chinese-built driverless cars in Germany and the U.K. next year, they announced Monday. Uber and Momenta shared similar ambitions earlier this year. As the New York Times’ Keith Bradsher notes, the Chinese EVs are still the cheapest available despite the EU’s harsh tariffs.
This is pathetic. So the EU can bar Chinese expansion into the EU, when China can cut of rare earths and other critical tech product inputs?
Back to India. Readers may recall that Indian Minister of External Affairs Jaishankar has repeatedly maintained that India has the right to buy oil at the cheapest price, and that that is particularly important for India given how many Indians are poor:
#WATCH | We have seen that India-Russia relationship has worked to advantage so if it works to my advantage I would like to keep that going: EAM S Jaishankar during a press briefing, in Moscow on Russian oil imports pic.twitter.com/ddcB7ryAfH
— ANI (@ANI) November 8, 2022
Quite a few comments on Twitter challenged the idea that Indian citizens were benefitting from discounted Russian oil:
Buying Russian oil is our choice though that is the bone of contention now between India and USA.
But the irony is Indian citizens got no benefit from this cheap import of oil from Russia. We are still paying a very high price of fuel.
Don’t know who all got benefit from…
— D.Muthukrishnan (@dmuthuk) August 4, 2025
However, this is an interesting take, even though one would have to get a lot more granular to evaluate second-order effects:
For India, losing 100% exports to the US (not 25% tariff, losing 100% exports) would have about the same effect as stopping buying oil from Russia. https://t.co/n5AOk7yvxp pic.twitter.com/GzfNCXEABd
— Nik Stankovic (@nikstankovic_) July 31, 2025
Now to the detail from Helmer on what India’s next moves are likely to be. From his talk with Dimitri Lascaris, staring at
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1 From India’s Ministry of External Affairs:
India has been targeted by the United States and the European Union for importing oil from Russia after the commencement of the Ukraine conflict. In fact, India began importing from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict.
The United States at that time actively encouraged such imports by India for strengthening global energy markets stability.
2. India’s imports are meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by global market situation. However, it is revealing that the very nations criticizing India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion.
3. The European Union in 2024 had a bilateral trade of Euro 67.5 billion in goods with Russia. In addition, it had trade in services estimated at Euro 17.2 billion in 2023. This is significantly more than India’s total trade with Russia that vear or subsequently. European imports of LNG in 2024, in fact, reached a record 16.5mn tonnes, surpassing the last record of 15.21mn tonnes in 2022.
4. Europe-Russia trade includes not just energy, but also fertilizers, mining products, chemicals, iron and steel and machinery and transport equipment.
5. Where the United States is concerned, it continues to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilizers as well as chemicals.
6. In this background, the targeting of India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.
