India saved billions by increasing imports of discounted Russian oil since the Ukraine war began. However, new US tariffs that started on Wednesday could quickly erase these savings. Analysts say India saved at least $17 billion but now faces major export losses due to these punitive tariffs.
The tariffs, imposed by US President Donald Trump, can reduce India’s exports by over 40%, or nearly $37 billion this fiscal year. The impact threatens jobs in sectors like textiles, gems, and jewelry. Experts warn the situation could harm Prime Minister Narendra Modi politically, especially ahead of key elections.
India is caught between its long-term partnership with Russia and its strategic ties with the US. New Delhi values Russia for cheap oil, defense supplies, and political support. At the same time, Washington remains India’s vital ally in balancing China’s influence in the Indo-Pacific.
The Indian government is discussing trade and energy cooperation with the US, but it hesitates to stop buying Russian oil. Russian crude now makes up about 40% of India’s oil imports. Stopping these imports abruptly would increase global oil prices and harm India’s economy.
This trade conflict also affects broader relations, including technology, visas, and global supply chains. Experts warn that rivals like China and Vietnam could benefit while India faces barriers in key markets. The tariffs underline rising geopolitical tensions and economic challenges between India and the US.