 "US President Donald Trump")
The government is closely monitoring announcements from Washington following US President Donald Trump’s threat to impose tariffs on nations purchasing Russian crude oil, natural gas and uranium, officials said, adding that the situation doesn’t merit concerns at the moment.
On July 9, US President Donald Trump publicly backed a proposed legislation that includes a provision of sanctioning countries such as India and China with 500 per cent tariffs for purchasing Russian energy. The Sanctioning Russia Act of 2025 also calls for deeper sanctions against Russian politicians, businesses and government entities. With bipartisan support, the bill is expected to get the Senate’s nod, US media has reported.
“Importing Russian oil has been challenging in the past 3 years, especially in 2025. India has continued to abide by all international rules on the matter. We have continuously been monitoring the developments in US-Russia relations, which have become very volatile. India and the United States are actively engaging in deepening trade relations, and this fact is not lost on Washington DC,” an official said.
Frustrated with Russian President Vladimir Putin over the sluggish pace of peace negotiations, Trump had warned of secondary sanctions against Russia, back in March as well. He had signalled that the US could impose a 25-50 per cent tariff on countries that continue buying Russian oil unless Putin agrees to a ceasefire in Ukraine. ALSO READ: India revises WTO retaliatory duties as US hikes steel, aluminium tariffs
Diversification ongoing
Another official pointed out that imports from traditional partners in West Asia have held steady, and India has enough diversified sources of crude oil. In FY25, Iraq ($27.35 billion), Saudi Arabia ($20.09 billion) and the United Arab Emirates ($13.86 billion) continued to be the second, third and fourth-largest sources of crude for India, following Russia, official data shows. The share of crude coming from these nations has seen a slow but steady rise in recent months as discounts on Russian crude had shrunk, and as the government prioritised the diversification of its oil imports.
He added that another reason has been the discounts on Russian crude shrinking to their lowest in 2 years as of May.
However, sources said the latest threat by Trump has unsettled Indian officials, given that Russia accounted for 35.14 per cent of India’s crude imports by value in FY25, up from 33.37 per cent in FY24 and 19.22 per cent in FY23. From holding less than a 1 per cent in India’s oil import basket before the Ukraine conflict began in February 2022, Russia has grown to become the largest supplier, displacing traditional sources such as Saudi Arabia, the United Arab Emirates, and Kuwait.
Importers have doubled down on Russian crude in recent months, imports of which rose to 2.22 million barrels per day (b/d) in June, up from 1.96 million b/d in May, energy cargo tracker Kpler estimated. As a result, crude flows from Russia rose to an 11-month high in the latest month.
Meanwhile, the US remains India’s largest export destination, with outbound trade reaching $86.5 billion in FY25, up from $77.5 billion in FY24. The US accounts for 19.7 per cent of India's total exports.
