The Indian Foreign Ministry released an angry statement this week claiming that they are being “targeted” by the United States and European Union for importing oil from Russia.

US President Trump has threatened to impose serious sanctions against India and any other country that economically supports or trades with Russia.

“India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don't care how many people in Ukraine are being killed by the Russian War Machine,” Trump said in a post on his Truth Social.

China has already rejected the imposition of new 100% duties on principle, saying the US has no right to dictate to Beijing from whom it buys its energy. Now the Indian government is taking a similarly hard line.

“India has been targeted by the United States and the European Union for importing oil from Russia after the commencement of the Ukraine conflict. In fact, India began importing from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict. The United States at that time actively encouraged such imports by India for strengthening global energy markets stability,” the government said in a statement released last week.

“In this background, the targeting of India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security,” the statement continued.

The statement argued that a ban on Indian exports is unfair and highlighted that the EU imports a lot more in 2024 than India does. It had a bilateral trade of €67.5bn in goods with Russia. In addition, it had trade in services estimated at €17.2bn in 2023.

“This is significantly more than India’s total trade with Russia that year or subsequently. European imports of LNG in 2024, in fact, reached a record 16.5mn tonnes, surpassing the last record of 15.21mn tonnes in 2022,” the government said. “Europe-Russia trade includes not just energy, but also fertilisers, mining products, chemicals, iron and steel and machinery and transport equipment.”

The Indian government put the knife in by pointing out that while the US is objecting to Indian energy imports, the US itself continues to import Russian fuel and raw materials including, uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilisers as well as chemicals. The Biden administration introduced a ban on Russian enriched uranium imports in May last year, but immediately introduced a five-year waiver for US companies as they are currently unable to source uranium from anywhere else.

“India’s imports are meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by the global market situation. However, it is revealing that the very nations criticising India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion,” the Indian statement said.

President Donald Trump  has said that India does not just buy oil for its own needs, but resells most of this raw material “at a large profit”, regardless of how many people Russia kills in Ukraine. 

At the same time, threats against India fit into the plot of Trump's main trade war. In April on Liberation Day,  India was singled out as one of the countries with which Washington hoped to conclude a trade agreement. But those negotiations turned out to be unexpectedly difficult.

Analysts have speculated that the threat of the August 8 deadline tariffs is just a warm up to put pressure on Delhi ahead of the next stage of US-Indian trade negotiations, scheduled for August 25-29.

Trump’s threat to impose additional tariffs on Indian imports in retaliation for its purchases of Russian oil is unlikely to push New Delhi into a wholesale shift away from Moscow, according to note by Shilan Shah, Deputy Chief Emerging Markets Economist at Capital Economics.

“India could in principle find suppliers other than Russia to meet its energy needs relatively easily with little economic impact,” Shah said, and India refiners have already begun reducing purchases from Russia. “But we doubt that India would make a wholehearted effort to wean itself off Russian oil. Domestically, it would not play well to be seen caving to Trump’s demands. In addition, Indian policymakers would be reluctant to upend generally cordial (and long-standing) relations with Russia.”

Trump announced last week that, in addition to a 25% tariff, India would face an unspecified penalty over its imports of oil and military equipment from Russia, a rate he has previously suggested could be as high as 100%. Since Russia’s invasion of Ukraine, India’s imports from the country have risen tenfold. If it were to comply with Washington’s demands, it would need to replace around a third of its oil imports.

Shah said the logistical challenges would be minimal: “Virtually all of India’s oil purchases from Russia arrive via ship; it would be much trickier to switch if it was delivered through pipeline. Indian refineries are able to switch grades relatively easily too.”

The macroeconomic impact would also be limited, with the discount on Russian Urals crude currently just $4 per barrel below Brent, far narrower than in 2022 and 2023.

“If India were to pay $4pb more on one-third of its oil imports, that would add c.$3-4bn (0.1% of GDP) to the current account deficit this year,” Shah said. “That isn’t a big problem… Meanwhile, it would add under 0.1%-pts to headline CPI inflation this year – that is negligible.”

Despite some reports of refiners halting Russian purchases, Shah said “India’s policymakers have been more defiant,” with the Ministry of External Affairs calling the threats “unjustified and unreasonable”. He added: “Ultimately the main reason that Indian policymakers may choose to hold their ground comes down to politics… There will be reluctance to upend what are generally cordial relations between Delhi and Moscow.”