India, the US lost from Trump’s tariff when Russia won
The United States imposed a tariff of up to 50% on imports of goods from India on Wednesday in a step which is an example of a textbook from a losing and defeating situation for the two countries, but poorly is the victory for the target in question, Russia.
An additional rate of 25% above the 25% levy on Indian goods imposed by US President Donald Trump seems to be because India continues to buy Russian crude oil.
Severe tariffs, among the highest Trump that have been imposed on imports from any country, it is impossible to give what he wants, and maybe really makes Delhi just more determined to continue to buy Russian oil.
India increasingly turned to Russian crude oil after the 2022 invasion to Ukraine made Western buyers end the purchase, with Russian oil rising to around 40% of India’s imports.
This dependency has helped make the price of crude oil lower by maintaining Russian oil in the global market, which will be far more stringent than the supply perspective if Moscow cannot sell his crude oil.
In turn, Indians also benefit because they have been able to find Russian crude oil at a lower price than the competitive value of other suppliers in the Middle East and Africa.
The question is whether it is better for India to face a 50% tariff on its exports to the United States and continue to buy Russian oil, or whether it will make more sense to bend Trump’s will and reduce imports from Russia to the level of US leaders.
On the basis of a strict economy it might be far more reasonable to surrender to Trump.
Indian imports from Russia are 1.88 million barrels per day (BPD) in the first half of 2025, according to data collected by the KPler Commodity Analyst.
For the purposes of calculations behind-envelope, let us assume that Russian oil is $ 5 per barrel is cheaper than what Indian distillers will be paid for alternative values.
This might actually be generous than Indian refiners, given the current discount between Russian Russian Ural (URL-E), the main class that India purchased, and the Global Brent Futures Brn1! is $ 3.66 per barrel.
But if the $ 5 discount is assumed and India bought an average of around 1.9 million BPD, it means that the draft saves around $ 3.5 billion per year by buying Russian oil.
Indian goods exports to the United States are worth $ 87 billion in 2024, and new tariffs are estimated by exporter groups to affect around 55% of this.
Because the 50% level is high enough to end most of the trade, India tends to surrender much more economically in losing access to the US market than its profit from buying Russian oil.
Politics to the front lines
But the decision to continue to buy Russian oil is likely to be made with politics in mind, not economy.
It will be difficult for Indian Prime Minister Narendra Modi to be seen bending his knees into Trump intimidation, because it will lose political capital at home.
India also tends to see Trump’s actions inconsistent, because US leaders seem to be happy for China to continue to buy Russian oil.
It might be a sign that Beijing has a greater influence on his trade relations with the United States, which originates from its dominance in the production of subtle critical metals and rare soil.
The actual risk is that the dispute between the largest economy in the world and the fifth largest increases.
The problem for Trump is that the tariff is mostly a type of pressure one-and-done. After being adopted and raised to a level that destroyed trade relations, they lost influence.
This means that if the tariff does not work and India continues to buy Russian oil, Trump must find a new way to press New Delhi.
India is also able to put its own pressure, because from a political point of view he can approach other US targets, such as Brazil and China.
This can stop all US energy purchases, which have increased in recent months.
India imported 234,000 US crude oil in the first half of 2025, and the third quarter import was estimated at 338,000 BPD by the KPler.
India also imported 11.51 million tons of US coal in the first half of 2025 and 1.22 million tons of liquid natural gas (LNG).
While loss of India as a market will not be enough to injure US energy exporters, it will be a sign that geopolitics are at risk of being more important in the energy market than fundamental supply and demand.
Overall, Trump’s tariff in India is at risk of having the opposite effect of what he meant, with a side consequence of driving a country that has become an ally to the arm of the US opponent.
India is at risk of losing economically from tariffs and may also face further actions from the United States.
The only real winner was Russian President Vladimir Putin, who continued to sell oil to India and had additional bonuses to see the relationship between the United States and India was destroyed, the factor that benefits him.
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Source: Reuters
