Indian Prime Minister Narendra Modi has a tricky balance while maintaining a close partnership between President Donald Trump and Russian leader Vladimir Putin, claiming that Moscow’s approved Western nations are a neutral party to the disappointing Russian-Ukraine war.
But now it appears Trump has lost his patience. Modi finally demands that he choose the side, using India’s continued purchase of Russian oil as leverage in his trade war.
The challenge pits Trump and Modi. Two nationalist leaders have often described friendship in warm words.
On Monday, Trump vowed to “essentially” raise India’s tariffs “for the next 24 hours” as he still buys Russian oil. It is not clear what will happen with the new tariff rate or whether he is currently having problems with India’s years of doing it. However, a new threat comes after he already announced a minimum 25% tariff on goods coming from India last week.
“Also, they’ve always bought the majority of military equipment from Russia, and together with Russia, they’re Russia’s biggest energy buyers, and when everyone wanted Russia to stop killings in Ukraine, everything isn’t good!” Trump wrote about the true society last week.
But for Modi it’s not that simple. Many other countries have been taken away to attack trade deals with the Trump administration, the world’s fourth-largest economy, but they have been unfairly targeted and rebelliously pushed back by saying they call the measure “unfair.”
The US and Europe still trade with Russia with other products, such as fertilizers and chemicals.
Here’s what you need to know about why India is reluctant to stop buying Russian oil:
India has long relied on Russia to help grow its crude oil-booming economy and population, and now has more than 1.4 billion people.
The world’s most populous country is already the third largest consumer in the world, and as India’s consumption rate is still growing rapidly, it is expected to surpass China by 2030, according to Reuters.
Millions of households have risen as India’s transformation into an economic superpower. This has resulted in more cars and motorcycles being purchased, and demand for gasoline has increased.
Russian crude accounts for 36% of India’s total imports, and Moscow has become the country’s top supplier, according to Muyu Xu, a senior oil analyst at trade information company Kpler, who cited figures for the first six months of the year.
After Russia invaded Ukraine in 2022, European countries largely halted Russian oil purchases. Now it flows mostly into Asia. China, India and Turkey are among the large Russian customers, and are important revenue streams for Moscow.
Delhi has a huge discount on Russian oil. “If not, it would not have been given to traditional oil and gas suppliers,” said Amitabsin, an associate professor at the Jawaharlalleneur University (JNU) Centre at the Centre for Russia and Central Asian Studies.
He added that India’s ongoing purchases are “a purely economic or commercial decision.” The Indian authorities have also claimed, but are filled with despair and rage from Ukraine and its supporters.
India has diversified its oil sources over the years, but once Russian oil is completely cut away, it leaves a large hole that is difficult to replace.
India imports 80% of its oil needs, and domestic oil production is not enough to make up for the difference. OPEC, a coalition of top oil producers in the world, said, “There may be a spare capacity, but it is difficult to ask you to pump 3.4 million barrels overnight,” Xu spoke with CNN in July, referring to Russia’s daily maritime exports.
That choice is also limited by other US actions. India was forced to stop buying oil from Iran and Venezuela after imposing sanctions on countries that Trump bought from those locations and threatened tariffs.
Before halting its purchases, India was one of Iran’s biggest clients, buying up to 480,000 barrels per day, according to Reuters.
“We tie our hands behind us,” Singh said. “India’s oil economy or markets can operate is very limited.”
For now, he added that it is unlikely that Delhi will succumb to Trump’s demands. Modi’s administration will continue trade talks with the US and work to break away from Russian crude oil, exploring the “traditional route” of Middle Eastern oil, but this “cannot be done overnight,” Singh said.
Russian oil also feeds India’s economy. The Indian economy plays an important role in the global oil trade. India claims that purchases from Russia have lowered global oil prices because they are not competing with Western countries for Middle Eastern oil.
When the Ukrainian-Russia war began during the Ukrainian-Russia regime, “everyone knew India was buying oil from Russia,” Singh said — but added that the Western countries tolerated it.
If India switches to import oil from elsewhere at higher costs, American consumers will also feel a hit. Some of the Russian crude oil sent to India is then refined and exported to other countries. This is because non-Russian products are not refined in sanctions against Moscow.
It is a loophole that has benefited both India’s economy and other recipient countries. In 2023, India exported $862.8 billion in sophisticated petroleum products, making it the world’s second largest exporter of petroleum products, according to the Bureau of Asian Studies (NBR).
According to the Energy Research Centre (CREA), some of the biggest buyers of these sophisticated products, made from Russian crude oil, include Europe, the US and the UK. Independent organisations have urged G7 countries to close this loophole and claim they will remove third countries, like India, to import Russian crude oil.
Historic Partnerships and Juggling Bonds
The India-Russia partnership goes beyond just oil, dating back decades. Another reason is that it’s not that easy to dismantle.
India officially formed nonalliance during the Cold War between the US and the Soviet Union. However, in the 1970s, when the US began providing military and financial aid to its Indian neighbours and longtime rival Pakistan, India began to lean towards the Soviet Union. This was when Russia began to provide arms to India.
In recent years, India has approached Washington and has stepped up the purchase of arms from the United States and its allies, including France and Israel.
Still, according to Cipri, India remains the top recipient of Russian weapons. And Modi remains friendly with Putin. Even paying a controversial visit to Moscow last year, the Russian president greets his counterparts in a hug and drives him personally.
Trump and Modi previously welcomed friendship, but at a rally in 2019, Trump declared that India “had no better friends than President Donald Trump.”
Professor Singh said the friendship is expected to “continue” when Trump arrives at the White House for his second term. But things got worse this time. India is not satisfied with Trump’s claim to credit for the ceasefire in the latest India-Pakistan conflict, or his accusations that their oil purchases support “supporting Russian war machinery,” he said.
Trump has also assaulted him and is increasingly irritated that he is unable to end the Ukraine-Russian war. “I don’t care what India is doing in Russia,” Trump wrote last week in a furious post about the true society. “They can defeat their dead economy together for everything I care about.”
