Informist, Monday, Sept. 1, 2025

--Trump: India buys most oil, military pdts from Russia, very little from US
--US Trump: India should have slashed tariffs to nothing years ago
--Trump: India now offered to slash tariffs to nothing but it's getting late
--US Trump: Trade with India so far totally one-sided disaster

NEW DELHI – India has now offered to cut its tariffs to nothing but it is getting late, US President Donald Trump said Monday, further complicating the already strained relations between the two countries. "They should have done so years ago," Trump said in a post on Truth Social while leaving "just some simple facts for people to ponder!!!"

Trump's unpleasant comments towards India comes amid the seemingly rising frustration between the two countries in their inabality to close the proposed bilateral trade deal. According to Trump, India sells "massive amount" of goods to their "biggest client" US, which in turn could sell "very little" given the high tariff New Delhi charged. "It has been a totally one sided disaster!" he said.

The US accounts for nearly 20% of India's total exports. In 2024-25 (Apr-Mar), India exported goods worth $86.51 billion to the US and had a trade surplus of $40.82 billion. Citing displeasure over the high trade gap, US has imposed 25% reciprocal tariffs on India, with an additional 25% as punitive tariff for trading with Russia. US' higher tariffs on India result in a pricing disadvantage of 30–35% for Indian exports, making them less competitive compared with those from China, Vietnam, Cambodia, the Philippines, and other Southeast and South Asian countries.

Indian exporters saw the proposed trade deal with the US as an insulation against the reciprocal tariffs but New Delhi and Washington are yet to iron out their differences over the US' demand to get access to India's politically and socially sensitive farm and dairy sector. India has always maintained a protective stance on its farm and dairy sector, but the US wants to push genetically modified crops and dairy products into India under the deal. New Delhi is unwilling to yield to these demands. If sustained, the 50% tariff could hurt India's growth by nearly half a percentage point.

Trump also continues to be miffed about India's oil and military product procurement from Russia. Although in the latest post, Trump seems to have finally disclosed what would be a win-win situation for Washington--India procuring oil and military products from the US. "Also, India buys most of its oil and military products from Russia, very little from the US," he said.

India has maintained close economic ties with Russia for several decades now. While India has traditionally relied on Moscow for military equipment, New Delhi has become one of the biggest buyers of the country's crude oil since Russia invaded Ukraine in February 2022.

India has been buying crude oil from Russia at discounted price amid sanctions by Western countries on Russia. The Group of Seven developed nations had initially imposed a $60-a-barrel price cap on Russian crude. Later, it imposed more sanctions to try to curb Moscow's petroleum sales. India bought Russian crude oil up to $30-a-barrel cheaper, though discounts have varied sharply over the past three years and have been around $2-$3 a barrel in recent times. The International Monetary Fund in February said India saved around $7 billion per year by importing crude oil from Russia at discounted prices.

To be able to escape Trump's tariff tirade, India may have to move away from Russian oil. To be fair, New Delhi has maintained that it was not fixated on Russian crude oil and will import from any country that suits its requirement. However, moving away from Russian oil may not be enough since Washington has been pushing countries to commit to buying energy from the US as part of the trade agreements, in addition to making investments there. The European Union committed to purchase $750 billion of US energy products over three years as part of its trade deal with Washington.

The next round of negotiations between India and the US for the bilateral trade agreement, expected to begin from Aug. 25, was postponed indefinitely without a new timeline. With the announcement of tariffs and a delay in the negotiations, Indian exports are likely to suffer a setback with shipments to the country's top export destination becoming more expensive. End

US$1 = INR 88.20

Reported by Priyasmita Dutta

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.