The Daily Populous Wednesday August 13rd, 2025 night edition
Authored by edition.cnn.com and submitted by strategicpublish

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Indian Prime Minister Narendra Modi has been performing a tricky balancing act – maintaining close partnerships with US President Donald Trump and Russia’s leader Vladimir Putin while insisting his country is a neutral party in the Russia-Ukraine war, to the dismay of Western nations who have sanctioned Moscow.

But now, it seems, Trump has lost his patience – demanding that Modi finally pick a side, and using India’s continued purchases of cheap Russian oil as leverage in his trade war.

The conundrum pits Trump and Modi, two nationalist leaders who have often described their friendship in warm terms, increasingly against each other.

On Wednesday, Trump announced sweeping and substantial tariffs on India, one of America’s most important trading partners. In addition to a 25% tariff that is set to go into effect Thursday, Trump also announced a 25% tariff on India that will go into effect later this month as punishment for importing Russian oil and gas.

Those combined penalties would bring the total tariff on goods imported from the world’s fifth-largest economy to a whopping 50% – among the highest the US charges.

Trump earlier this week threatened India with the new tariffs, saying it was helping Russia wage war in Ukraine.

“India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine,” he wrote on social media.

A crude oil tanker owned by Russia's leading tanker group Sovcomflot, transiting through the Bosphorus in Istanbul, Turkey on April 4, 2024. Yoruk Isik/Reuters

But for Modi, it’s not so simple. While many other countries have scrambled to strike trade deals with the Trump administration, India has pushed back defiantly, saying it is being unfairly targeted and calling the measure “unjustified.”

The US and Europe, it pointed out, still trade with Russia on other products such as fertilizers and chemicals.

Here’s what you need to know about why India is reluctant to stop buying Russian oil.

Why does India need Russian oil?

India has long been reliant on Russia for crude oil to support its booming economy and growing population, now at more than 1.4 billion people.

The world’s most populous nation is already the third-biggest consumer of oil globally, and with India’s consumption rate still growing rapidly, it is expected to surpass China by 2030, according to Reuters.

India’s transformation into an economic superpower has uplifted millions of households – which in turn have bought more cars and motorcycles, driving up the demand for gasoline.

Russian crude oil accounts for 36% of India’s overall imports, making Moscow the country’s top supplier, according to Muyu Xu, a senior oil analyst at trade intelligence firm Kpler, who cited figures for the first six months of this year.

Why can’t India get oil somewhere else?

After Russia invaded Ukraine in 2022, European nations largely stopped buying Russian oil. It now flows primarily into Asia – with China, India and Turkey among Russia’s big clients – and is a vital revenue stream for Moscow.

Delhi is buying Russian oil at a heavy discount, “which otherwise would not have been given by the traditional oil and gas suppliers,” said Amitabh Singh, associate professor at Jawaharlal Nehru University’s (JNU) Centre for Russian and Central Asian Studies.

He added that India’s continuing purchases were “a purely economic or commercial decision” – something Indian authorities have also argued, but which has been met with derision and anger from Ukraine and its supporters.

While India has diversified its oil sources over the years, cutting out Russian oil entirely would leave a gaping hole that’s hard to replace.

India imports 80% of its oil needs, and its domestic oil production isn’t enough to make up the difference. OPEC, the coalition of the world’s top oil producers, may have “some spare capacity, but it’s difficult to ask them to pump 3.4 million barrels overnight,” said Xu when she spoke to CNN in July, referring to Russia’s daily seaborne exports.

Its choices have also been limited by other US actions – India was forced to stop buying oil from Iran and Venezuela after Trump imposed sanctions and threatened tariffs against countries that bought from those places.

Before it halted its purchases, India had been one of Iran’s biggest clients, buying up to 480,000 barrels per day, according to Reuters.

“We have our hands tied at the back,” said Singh. “There is very limited space in which the Indian oil economy or market can operate.”

For now, he added, it’s unlikely Delhi will bow to Trump’s demands. Modi’s administration will continue navigating trade talks with the US and explore the “traditional route” of Middle Eastern oil while it works to wean itself off Russian crude – but this it “cannot do overnight,” said Singh.

Indian Prime Minister Narendra Modi in Aylesbury, England, on July 24, 2025. Kin Cheung/WPA Pool/Getty Images

Changes could spike global oil prices, including in US

Russia’s oil also feeds India’s economy, which plays a key role in the global oil trade. India argues that its purchases from Russia have kept global oil prices lower, as it’s not competing with Western nations for Middle Eastern oil.

When the Ukraine-Russia war kicked off during the Biden administration, “everyone knew that India is buying oil from Russia,” said Singh – but added that Western nations had tolerated it “because they knew that if India is not buying oil from Russia, then inflation will go up.”

If India switches to importing oil from somewhere else at a higher cost, American consumers will likely feel the hit, too. Some of the Russian crude oil sent to India is then refined and exported back out to other countries – because sanctions on Moscow don’t include products refined outside Russia.

It’s a loophole that has benefited both India’s economy and other recipient nations. In 2023, India exported $86.28 billion in refined oil products, making it the world’s second-biggest exporter of petroleum products, according to the National Bureau of Asian Research (NBR).

Some of the biggest buyers of these refined products, made from Russian crude oil, include Europe, the US, and the UK, according to the Centre for Research on Energy and Clean Air (CREA). The independent organization has urged G7 nations to close this loophole, arguing it would disincentivize third countries – like India – to import Russian crude.

India and Russia’s partnership goes beyond just oil and stretches back decades – another reason it’s not so easy to dismantle.

India was officially nonaligned during the Cold War between the US and the USSR. However, India began to lean towards the Soviet Union in the 1970s when the US began providing military and financial assistance to India’s neighbor and longtime rival Pakistan. This was when Russia started providing arms to India.

In recent years, India has drawn closer to Washington, and ramped up arms purchases from America and its allies, including France and Israel.

Still, India remains the top recipient of Russian arms, according to SIPRI. And Modi remains friendly with Putin – even paying a controversial visit to Moscow last year, with the Russian president greeting his counterpart with a hug and personally driving him around.

Trump and Modi, too, have previously hailed their friendship, with Trump declaring at a 2019 rally that India had “never had a better friend as President than President Donald Trump.”

Singh, the professor, said it was expected the friendship “would continue” when Trump arrived at the White House for his second term. But things have soured this time around; India isn’t happy with Trump claiming credit for a ceasefire in the latest India-Pakistan conflict, or with his accusations that their oil purchases are helping “prop up a Russian war machine,” he said.

Trump has lashed out too, increasingly frustrated at his inability to end the Ukraine-Russia war – something he’d promised to do on his first day in office. “I don’t care what India does with Russia,” Trump wrote in an irate post on Truth Social last week. “They can take their dead economies down together, for all I care.”

HedonisticFrog on August 12nd, 2025 at 16:54 UTC »

Trump has shown that he's terrible at making deals and backs down at the first sign of resistance. Why would they capitulate to such a weak man? They'll eventually give a very small concession and Trump will claim victory and move on.

perry147 on August 12nd, 2025 at 16:26 UTC »

Because India is getting very cheap oil, and does not want to pick a side in this new Cold War. India is for India.

fuggitdude22 on August 12nd, 2025 at 16:24 UTC »

Trump made it clear that he is siding with Pakistan....I don't know why India would go out of their way to appease him.

It isn't like Trump is serious about protecting Ukraine's territorial integrity either.