United States’ President Donald Trump’s renewed threat to impose higher tariffs on India is not an isolated event. It follows months of tense trade negotiations and comes after the United States last year doubled import tariffs on several Indian goods to as high as 50%. Washington justified this move as a response to India’s large-scale purchases of Russian crude oil since the outbreak of the Ukraine war. In reality, these actions mark the escalation of a trade conflict driven more by geopolitics than by economic reasoning.
Since the start of the Ukraine conflict, India has imported crude oil worth around €144 billion from Russia. These purchases were motivated largely by discounts on Russian oil at a time of volatile global energy prices. For India – a country heavily reliant on imported energy and home to over 1.4 billion people – keeping fuel affordable is essential. Higher energy costs quickly affect everyday life, pushing up prices for food, transport and other essentials. In this context, India’s oil imports are driven by practical economic concerns rather than political alignment.
It is also important to note that India’s imports of American oil have risen substantially. The United States has become one of India’s key energy suppliers, particularly in crude oil and liquefied natural gas. India’s energy strategy is clearly one of diversification, not allegiance. Buying oil from Russia does not mean rejecting cooperation with the US. In fact, balancing imports from multiple sources helps India manage price fluctuations and secure energy for its growing economy.
These energy trade patterns did not emerge in isolation. They reflect a broader history of US-India trade tensions under Trump’s presidency. Over the years, disputes over market access, tariffs and trade imbalances have simmered. The doubling of tariffs on Indian goods to 50% last year marked a significant escalation, sending a signal that trade policy is being used as a tool of geopolitical pressure rather than economic management.
The risks of this approach extend far beyond the bilateral relationship. Globalisation has delivered immense benefits: lower costs, greater access to goods, technology transfer and higher growth, especially for developing countries. While it has created challenges, particularly in certain industries and regions, its overall contribution to global prosperity is undeniable.
Turning away from global trade through tariffs and protectionism, however, carries serious costs. Trade wars and sanctions disrupt supply chains, increase uncertainty for businesses and raise prices for consumers. Ironically, protectionist measures often hurt the countries that implement them. Many American firms rely on imported components or raw materials. When tariffs increase, production costs rise and consumers end up paying more. Analyses of Trump’s earlier trade wars have shown that American households bore a significant share of the cost, while the intended pressure on foreign exporters was limited.
Targeting India also carries strategic risks. India is one of the world’s fastest-growing large economies and a key partner for the US in areas such as technology, climate cooperation and regional security. A prolonged trade confrontation could strain this partnership, undermining collaboration on issues that require shared leadership. Credibility is another concern. Singling out India for buying Russian oil while overlooking similar transactions by other countries weakens the argument. Trade restrictions that appear selective or politically motivated are more likely to provoke retaliation than cooperation.
The lesson is clear: tariffs are blunt tools for addressing complex global issues. Using them to enforce geopolitical objectives may generate headlines, but it rarely produces sustainable economic outcomes. In a connected world, no country can isolate itself without consequences.
Instead of escalating tariffs, India and the United States should pursue constructive engagement. Strengthening energy cooperation – through oil, gas and renewable – would enhance energy security for both the nations. Regular trade consultations can help prevent disputes from escalating into full-blown trade wars.
Policymakers should also recognise the value of globalisation. While not perfect, open trade has brought tangible benefits to both countries and the world. The solution is not to dismantle global trade but to make it more fair, resilient and inclusive. Cooperation, not confrontation, offers the best chance for shared prosperity in an uncertain global economy. Trade wars rarely create winners. In contrast, dialogue, trust and collaboration can help nations navigate geopolitical and economic challenges without harming ordinary citizens or undermining long-term growth.
(Dr Gulam Goush Ansari is Assistant Professor of Economics, Government College of Arts, Science and Commerce, Khandola-Marcela.)
