India caught in crossfire as US slaps new tariffs over Russian oil ties
Indian oil refiners are holding off on any changes to their Russian crude purchases as they await formal instructions from the government, following the United States' announcement of new tariffs targeting Indian goods.
According to four industry sources, quoted by foreign media, the 25 per cent duties introduced in response to New Delhi’s ongoing energy ties with Moscow are adding pressure to an already strained trade relationship.
The Trump administration stated that the new measures are intended to penalise India for continuing to import Russian oil, which Washington argues indirectly supports Russia’s war effort in Ukraine. These duties come in addition to existing tariffs previously imposed by the US to address its trade deficit with India.
New Delhi has strongly objected to the latest action, calling it “unfair, unjustified and unreasonable.”
Despite the growing diplomatic tension, Indian private refiners are continuing with their imports. “So far, we have not been told anything by the government, so we will not stop Russian oil imports,” said an official at a private refining company.
India, which ranks as the world's third-largest importer and consumer of oil, sources over a third of its crude from Russia. While state-owned refineries have paused purchases of Russian oil, private-sector players—including Reliance Industries, Nayara Energy, and HPCL Mittal Energy (HMEL)—have continued lifting Russian barrels.
US President Donald Trump has openly criticised India’s reliance on Russian crude, stating that it contributes to financing Moscow’s military campaign in Ukraine.
If Indian refiners are ultimately directed to cut back on Russian oil, they are expected to pivot toward alternative suppliers in the Middle East, Africa, and the Americas. Saudi Arabia, which is currently India’s third-largest supplier, has already responded by raising its official selling prices for the Asian market.
“In anticipation of higher Indian demand, they have kept the prices very strong,” said a refining sector source in India. The market is now bracing for possible shifts in trade flows, favouring Middle Eastern producers over Russian crude.
The new tariffs are set to be implemented in 21 days. However, President Trump’s executive order allows for revisions if either Russia or India "align sufficiently with the United States on national security, foreign policy, and economic matters."
By Tamilla Hasanova