Trump India tariff: US President Donald Trump last week announced a 25% tariff on Indian imports and indicated possible penalties related to India’s ongoing purchases of Russian oil. On Monday, Trump reiterated that he would be “substantially raising” the tariff on Indian exports to the US over New Delhi’s purchases of Russian oil.
While the White House had hoped that New Delhi might reassess its Russian oil trade, potentially impacting shipments to Indian ports, the Modi government hasn’t given Indian oil refiners instructions to stop buying Russian oil, signalling New Delhi’s tough stance on the issue.
According to a Reuters report, India will likely keep purchasing oil from Russia despite Trump’s threats.
Trump India tariffs: Latest news
“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,” Trump posted on his social media platform Truth Social. “They don’t care how many people in Ukraine are being killed by the Russian war machine. Because of this, I will be substantially raising the tariff paid by India to the USA,” Trump said.
In response, New Delhi said the targeting of India was “unjustified and unreasonable.” Like any major economy, India would take all necessary measures to safeguard its national interests and economic security, the external affairs ministry said in a statement.
5 reasons for India’s tough stand on Trump’s tariffs
According to the Indian stock market experts, New Delhi is looking beyond business and Trump’s tariffs.
They are focused on a long-term goal where India maintains control over its economic and strategic decisions, rather than yielding to external pressure. According to market experts, giving in to US pressure over Russian oil imports seems unlikely—especially now that India has begun importing naphtha from Russia. They outlined five key reasons behind this stance: clear diplomatic strategy, economic self-control, a self-reliant defence system, ongoing naphtha imports from Russia, and a strong reciprocal action plan.
1] Trump-India-Russia triangle: India has closer strategic ties with Russia than with the US, according to experts. “After Operation Sindoor, the US president hinted that Pakistan was closer to them as it didn’t use their veto power to stop the IMF aid to the Islamic nation. So, it seems the Indian government has made its decision that the US is their ‘friend’ and Russia is their ‘brother.’ When New Delhi has a choice, they will choose brother over friend,” said Sandeep Pandey, co-founder of Basav Capital.
2] New Delhi’s tough stand in India-US trade deal: Sandeep Pandey of Basav Capital said the Indian government is looking beyond Trump’s tariffs and the India-US trade deal. He said that the Indian economy is agriculture-driven, where around two-thirds of the national GDP comes from the agriculture sector. “Opening this sector for a foreign player like the US would jeopardise the security of the national economy, as essential triggers like inflation and economic growth would slip from the government’s control. It will give access to the US and put the national economy in danger,” Pandey said.
3] Naptha imports from Russia: India stopping Russian crude oil import looks unlikely in the light of Naptha imports from Russia.
“This move is the next step towards strengthening the Indian economy by breaking China’s monopoly on importing chemicals, plastics, and chemical resins. In the wake of the Russia-Ukraine war, Russia is unable to export Naphtha to the European and some other countries, as Moscow faces sanctions from the US and European countries. This developed China’s monopoly on global merchandise. This move by India is expected to break the Chinese monopoly, and India is expected to become a net exporter of Naptha after meeting its domestic needs,” said Anuj Gupta, Director at Ya Wealth.
Explaining the benefits of Naphtha imports and its ability to mitigate the impact of Trump’s tariffs, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, “India’s decision to import Naphtha from Russia marks a significant strategic shift aimed at strengthening economic resilience and strengthening its industrial base. This move diversifies critical supply chains essential for reducing overdependence on traditional sources and brings down input costs, particularly in energy-intensive sectors like petrochemicals and defence manufacturing. As India pushes back against Chinese dominance in the chemical industry, this import strategy aligns with its goal of asserting greater control over domestic production capabilities.”
The SMC Global Securities expert said New Delhi’s move to import Naptha from Russia signals India’s commitment to economic sovereignty and strategic autonomy in an increasingly separated global landscape.
4] Self-reliant defence system: Commenting on how the Indian government is standing firm in the face of US pressure and not rushing to sign the India-US trade deal, Sandeep Pandey said, “The US administration is trying to kill many sparrows with a single arrow — Russian oil imports. They know that Russia transfers both fighter jets and its technologies to India, which has enabled India to a position where it can develop fighter jets. Starting Naptha from Russia is the next step in strengthening Indo-Russian defence ties, as it would help India develop a body of fighter jets and defence drones. So, accepting the US demand to stop importing Russian crude oil seems beyond reality. It will jeopardise India’s defence program.”
5] Probability of reciprocal tariffs: Highlighting Indian strategy in not acceding to the US demands in the India-US trade deal, Avinash Gorakshkar, a SEBI-registered fundamental analyst, said, “The way the US government has raised tariffs on Indian imports, the Indian government may also raise tariffs on US imports. However, the US tariffs are more like a bully, while the Indian tariffs would be a diplomatic move. The Indian government may also consider reimposing the digital tax on income from online digital advertisements from US companies. If they do so, it would be highly detrimental for US tech giants like Microsoft, Meta, Alphabet, Google, Amazon, etc.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
