The United States has intensified economic pressure on India, warning of additional tariffs if peace talks between President Donald Trump and Russian President Vladimir Putin fail to yield results.
The talks, scheduled for August 15 in Anchorage, Alaska, aim to broker a ceasefire in the Russia-Ukraine war, which began with Russia’s invasion in February 2022.
India’s significant increase in Russian oil imports, now constituting 35% to 40% of its total oil imports in 2024, has strained US-India relations, prompting Trump to double tariffs on Indian goods to 50%.
US Treasury Secretary Scott Bessent warned that further sanctions or tariffs could be imposed if the Alaska talks falter, citing India’s purchase of Russian oil as a factor fueling Moscow’s war efforts.
Initially, a 25% tariff was placed on Indian goods, followed by an additional 25% penalty on August 7 for India’s energy and defense ties with Russia.
India’s External Affairs Ministry called the tariffs “unfair, unjustified and unreasonable,” emphasizing that its oil imports are driven by market factors to ensure energy security for its 1.4 billion citizens.
India also noted that other nations criticizing its Russian trade engage in similar practices.
The 50% tariff, set to take effect on August 27, positions India as the most heavily taxed US trading partner in Asia, potentially disrupting its export-driven industries like textiles and jewelry.
Experts warn that this could reduce India’s economic growth by up to 0.5%.
Trade negotiations, ongoing for months, face hurdles over India’s reluctance to lower duties on agriculture and dairy products.
US negotiators are expected to visit India on August 25 to resume talks, but the outcome remains uncertain.
Prime Minister Narendra Modi has reaffirmed India’s commitment to protecting its farmers’ interests and supporting peace efforts in Ukraine.
The US has urged European allies to join in imposing secondary sanctions to increase pressure on Russia.
Bessent emphasized the need for Europe to align with US efforts to create leverage in the peace talks.
Meanwhile, India’s continued reliance on Russian oil, which rose from 3% of its imports in 2021, underscores its energy security priorities.
The upcoming Trump-Putin summit could determine whether India faces further economic penalties or finds a path to ease tensions with the US.