As Trump’s Tariffs Kick In, India’s $17 Billion Russian Oil Gains Erased

India-West News Desk

NEW DELHI – India’s economic windfall from cheap Russian crude is being rapidly erased by sweeping U.S. tariffs that have come into effect, a development that could reshape both trade flows and geopolitics.

India has saved at least $17 billion since early 2022 by ramping up imports of discounted Russian oil, according to a Reuters report. But President Donald Trump’s decision to impose tariffs of up to 50% on Indian goods could wipe out those gains, with exports projected to fall by more than 40% this fiscal year, Reuters said. The Global Trade Research Initiative (GTRI) estimates losses could reach $37 billion.

The fallout threatens key Indian sectors such as textiles, gems, and jewelry, which are heavily export-dependent and employ millions.

The crisis also complicates India’s foreign policy. Russian oil now makes up nearly 40% of India’s crude imports, up from negligible levels before the Ukraine war. Any sharp cut in Russian purchases, experts told Reuters, would be economically unfeasible and politically risky, since it could be seen as India bowing to U.S. pressure. Reliance Industries, led by billionaire Mukesh Ambani, has been the biggest buyer, channeling crude through its massive refinery complex in Gujarat.

New Delhi has quietly signaled willingness to expand U.S. energy imports but remains reluctant to sever ties with Moscow, which is also India’s largest defense supplier. “India needs Russia for defense equipment, cheap oil when available, and political backing on sensitive issues,” a former Indian diplomat told Reuters.

Trump’s tariffs have plunged U.S.-India relations into their most difficult phase in decades, echoing the chill after Washington sanctioned India over its 1998 nuclear tests. Beyond trade, analysts warn the standoff could spill into areas like work visas for Indian tech workers and offshoring of IT services.

Even if partial relief is negotiated, economists say the damage to trade flows and investor confidence could persist for years, forcing India to accelerate its search for alternative export markets.