On the evening of August 4, U.S. President Donald Trump posted on social media that India not only purchases large quantities of Russian oil but also resells most of it on the open market for substantial profits. Trump stated he would significantly increase tariffs on Indian exports to the U.S.

On July 30, Trump announced a 25% tariff on Indian goods exported to the U.S. and unspecified additional penalties targeting New Delhi's energy and arms purchases from Russia. This threat came one day after Trump shortened the deadline for Russia to agree to a ceasefire with Ukraine.

Washington and its allies view India's purchase of Russian energy as tacit support for Moscow, undermining the effectiveness of sanctions imposed over the Russia-Ukraine war.

The day after announcing the tariffs, Trump wrote on Truth Social: "I don't care what India and Russia do—they can drag their dying economies down together for all I care."

Following the news, India-focused ETFs listed in the U.S. stock market plummeted.

How Close Are India-Russia Ties?

For over seven decades, India and Russia have maintained a strong and stable relationship. Indian Foreign Minister Subrahmanyam Jaishankar noted this longstanding ties date back to the Cold War era, when the U.S. grew closer to India's rival Pakistan while India fostered friendship with Moscow.

Though New Delhi claimed non-alignment during the Cold War, the 1971 Bangladesh Liberation War—where the U.S. backed Pakistan—drew India closer to the Soviet Union. Over the next 30 years, cooperation deepened in critical sectors like space, nuclear energy, and defense.

In recent decades, as India-U.S. relations improved, India reduced its heavy reliance on Russian-made weapons, sourcing more arms from the U.S. and Europe. Prime Minister Narendra Modi has maintained traditional ties with Moscow while deepening cooperation with Washington.

After the Russia-Ukraine war began and Western sanctions intensified, India ramped up purchases of Russian oil. As a major power, India has repeatedly abstained from UN votes condemning Putin and refused to join punitive measures against Russia.

Modi maintains close ties with Putin, visiting Russia last October. Putin is expected to visit India later this year.

As the world's third-largest oil consumer, India now sources about 35% of its crude from Russia—up from just 1% before the war. India relies on Russian seaborne oil due to its below-market prices.

Traditionally dependent on Middle Eastern suppliers like Saudi Arabia, reducing Russian oil imports would force India back to Middle Eastern sources, inevitably raising import costs.