Trump backs 500% tariffs on Russia trade partners: What it means for India

Donald Trump backs Senate legislation enabling tariffs of up to 500% on countries trading with Russia, a move that could significantly affect India and China

US President Donald Trump has strongly supported a new bill aimed at imposing sanctions on countries that maintain trade ties with Russia, marking a significant escalation in Washington’s efforts to squeeze Moscow’s economic lifelines. The move is proposed to curb Russia’s funding capabilities and thereby put an end to the ongoing conflict in Ukraine.

What's the latest

Before leaving Florida on Sunday (local time) to return to the White House, Trump said that he would be "okay" with Senate legislation to sanction countries conducting business with Russia.

 

"The Republicans are putting in legislation that is very tough, sanctioning, etcetera, on any country doing business with Russia. We may add Iran to the list, I suggested that," Trump said while speaking to reporters. "Any country doing business with Russia will be very heavily sanctioned."

 

Why it matters for India

According to Bloomberg, the new bill would allow Trump to impose tariffs of up to 500 per cent on imports from countries that have trade ties with Russia. The move is likely to impact India and China the most, given that they are two of Moscow's biggest trading partners. 

 

According to the Centre for Research on Energy and Clean Air (CREA), India remained the second-largest buyer of Russian fossil fuels in October, importing a total of €3.1 billion. Crude oil dominated India’s purchases at 81 per cent (€2.5 billion), followed by coal at 11 per cent (€351 million) and oil products at 7 per cent (€222 million).

 

India stands only second to China, which imported €5.8 billion worth of energy from Russia in October. Crude oil made up 63 per cent (€3.7 billion) of China’s purchases, followed by coal and pipeline gas, among others.

Trump's previous actions against India

While Trump had earlier said he would discuss with the European Union the possibility of working on a bill targeting countries that trade with Russia, his latest remarks mark his strongest statement yet on imposing such sanctions.

 

The Trump administration has already imposed a 50 per cent tariff on imports from India, including a 25 per cent penalty for buying Russian crude, starting August 27. While the two countries claim to maintain friendly ties and are engaging in trade talks, no new deal has been reached so far.

 

Trump's efforts to stop Russia's escalation in Ukraine will also add to his claimed list of "stopping wars". After helping reach a peace deal between Hamas and Israel last month, Trump claimed that he had stopped eight wars.

What is India's stance?

According to media reports, while the state-run refiners were cutting their reliance on Russian crude, private players stepped up procurement in September. Data from CREA states that while private refiners’ imports constituted over two-thirds of India’s total imports, state-owned refineries almost doubled their volumes month-on-month in October. 

 

India’s overall imports of Russian crude rose by 11 per cent month-on-month in October, despite Trump’s claim that Prime Minister Narendra Modi had assured him India would stop purchasing oil from Russia. However, the Centre dismissed those remarks, reiterating that its top priority is to protect domestic consumer interests.

 

India, however, has been stepping up efforts to diversify its energy sources. Minister of Petroleum and Natural Gas Hardeep Singh Puri on Monday announced that India is opening up further to the US market.

 

In an X post on Monday, he said, "One of the largest and the world’s fastest-growing LPG markets opens up to the United States. In our endeavour to provide secure, affordable supplies of LPG to the people of India, we have been diversifying our LPG sourcing.

 

"In a significant development, Indian PSU oil companies have successfully concluded a 1-year deal for imports of around 2.2 MTPA LPG, close to 10 per cent of our annual imports, for the contract year 2026, to be sourced from the US Gulf Coast, the first structured contract of US LPG for the Indian market," he said.