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US uses tariffs to strongarm India on Russia ties

  • By Al Mayadeen English
  • Source: Agencies
  • 4 Aug 2025 08:53
  • 1 Shares
4 Min Read

The Trump administration escalates its campaign against India's energy independence, accusing New Delhi of funding the Ukraine war while leveraging trade threats to dictate foreign policy.

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  • US uses tariffs to strongarm India on Russia ties
    White House deputy chief of staff for policy Stephen Miller listens to US President Donald Trump speak with the media during a meeting with Britain's Prime Minister Keir Starmer at the Trump Turnberry golf course in Turnberry, Scotland, Monday, July 28, 2025 (AP)

A senior advisor to US President Donald Trump accused India of indirectly supporting the war in Ukraine through its ongoing oil trade with Moscow. The comments came as the Trump administration increased diplomatic pressure on New Delhi to halt these transactions.

Speaking on Fox News’ Sunday Morning Futures, White House Deputy Chief of Staff Stephen Miller stated, “What he (Trump) said very clearly is that it is not acceptable for India to continue financing this war by purchasing the oil from Russia.”

Miller, known for his influence in the Trump administration, delivered one of the strongest rebukes yet against India, a key strategic partner in the Indo-Pacific.

Highlighting the scale of India's purchases, Miller added, “People will be shocked to learn that India is basically tied with China in purchasing Russian oil. That's an astonishing fact.”

His remarks come amid rising criticism of countries that continue energy trade with Russia despite Western efforts to isolate the Kremlin over the Ukraine war.

India stands its ground

The Indian Embassy in Washington did not immediately comment on Miller’s accusations. However, Indian officials told Reuters on Saturday that the government intends to maintain its oil imports from Russia, despite mounting threats from Washington.

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Tensions escalated further last week as the US imposed a 25% tariff on Indian goods, citing India’s acquisition of Russian military hardware and energy. President Trump has also floated the possibility of slapping 100% tariffs on imports from nations that continue buying Russian oil, unless Moscow agrees to a significant peace agreement with Ukraine.

Despite the tough rhetoric, Miller noted the strength of Trump’s personal rapport with Indian Prime Minister Narendra Modi, describing their relationship as “tremendous". His comment appeared aimed at maintaining diplomatic balance amid a widening rift over the war in Ukraine.

US-India trade relations

The US is India's largest export destination, with bilateral trade totaling about $190 billion in 2024. Indian exports to the US include pharmaceuticals, information technology services, textiles, and machinery. The new tariffs threaten to disrupt these sectors and may lead to retaliatory measures from India.

The Trump administration has maintained that the 25% tariff will serve as leverage to push for a more equitable trade agreement. Despite five rounds of negotiations, major sticking points remain, particularly over India's resistance to allowing genetically modified crops and expanded dairy market access.

India's trade policy evolution

India’s trade policies have gone through notable transformation over the past several decades. Post-independence, India adopted a protectionist strategy centered around import substitution and state-led industrialization. The era of the "License Raj" saw some of the highest global tariffs, extensive import licensing, and significant restrictions on foreign investment.

The 1991 economic crisis marked a turning point, prompting India to liberalize its economy. The reforms included slashing tariffs, dismantling import licensing, and encouraging foreign investment. As a result, India's average tariffs dropped from 80% in the early 1990s to approximately 10% by 2008, and its trade-to-GDP ratio increased substantially.

More recently, however, India has shown signs of returning to strategic protectionism. Through initiatives like "Made in India" and "Atmanirbhar Bharat" (Self-Reliant India), the government has promoted domestic manufacturing while introducing quality control measures and non-tariff barriers for numerous imported goods. These policies have drawn criticism from several trade partners, including the United States.

Although Indian officials have not issued a formal response to the new tariffs, sources suggest that the government is preparing contingency plans, including exploring new export markets and trade partnerships. Despite recent pressures, India's broader trade strategy remains focused on balancing domestic industrial development with international engagement. The latest US tariffs are expected to test the resilience of this approach as India seeks to maintain its global economic standing while addressing the needs of its local industries.

Read more: US threatens new tariffs on Russian oil buyers after Moscow ultimatum

  • United States
  • US tarrifs
  • Russian oil
  • Russia
  • India
  • war in Ukraine

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