President Donald Trump has issued a stark warning to India: halt all imports of Russian crude oil within 50 days or face the full weight of secondary US sanctions. The move comes as part of a broader effort to pressure Moscow into agreeing to a peace deal over Ukraine, using energy trade as leverage.
In June 2025, India’s imports of Russian crude reached 2.08 million barrels per day, surpassing even China and marking a post-conflict high. Russia now supplies around 40% of India’s total crude imports—a dramatic increase from less than 1% before the Ukraine conflict began.
"The message from Trump is clear: pressure Moscow or pay the price," said an industry analyst. "It's a geopolitical trap—India must choose between affordable energy and strategic risk."
India’s Costly Dilemma
Analysts warn that a sudden shift away from Russian oil would be costly for India. Alternative sources may be available, but at significantly higher prices. India would also lose the lucrative margin earned from refining discounted Russian crude into petroleum products for re-export.
Currently, Indian refineries and trading firms bypass sanctions by using non-Western shipping fleets and insurance mechanisms. Payments are settled in rupees, rubles, yuan, UAE dirhams, and possibly even cryptocurrencies. Transactions are processed through banks like UCO Bank and IndusInd Bank, which have no exposure to the Western financial system—shielding them from sanctions risk.
India Pushes Back
India’s Minister of Petroleum Hardeep Singh Puri issued a stark warning in response. He cautioned that removing Russian oil—roughly 10% of daily global supply worth $97 million—could send prices soaring to $120–130 per barrel, triggering inflation and economic disruption worldwide.
"If these threats are enacted, it will hurt not just India or Russia—but the entire global economy," said Puri.
The Indian side also pointed to an apparent contradiction: Trump’s position diverges from that of the US Treasury Department, which has supported India's purchases of Russian oil under the $60/barrel price cap. Washington previously viewed this as a way to maintain global supply while curbing Moscow’s revenues.
Broader Implications for US-India Ties
The threat also undermines recent negotiations on a 20% reciprocal tariff agreement between India and the US. Indian officials question the rationale of months of bilateral talks, now seemingly overridden by unilateral pressure from Washington.
Analysts suggest that India may respond by scaling back strategic cooperation with the US, especially in sensitive areas like technology, defense, and geopolitical alignment against China.
Moreover, any implementation of secondary sanctions could deepen skepticism among major powers like India and China toward entering into future economic agreements with the US, due to perceived instability in American policy direction.
