Despite its current strong opposition, US Commerce Secretary Howard Lutnick publicly stated that India will probably “say sorry” and try to reach a trade agreement with the US within the next one to two months.
Lutnick cautioned that India might face devastating tariffs of up to 50% on its exports to the US unless it reverses its course and opens its market, stops buying Russian oil, and distances itself from the BRICS alliance (which includes China and Russia).
He called India’s resistance “all bravado” because, although it may feel good to oppose the US, companies will eventually want to reach an agreement in order to keep access to the profitable US market.
In the background of this conflict, Russia’s desire to find consumers has resulted in much lower pricing for Russian oil, which India continues to purchase in large quantities.
In response, the United States, under President Donald Trump, imposed a 25% reciprocal tariff on Indian goods first. This was followed by a 25% duty explicitly imposed as a penalty for India’s imports of Russian oil, increasing the overall tariff burden to 50%.
India has referred to these prices as “unjustified and unreasonable” and has insisted that economic factors like cost and logistics, as well as national strategic objectives, inform its energy procurement choices, including the purchase of Russian oil. Nirmala Sitharaman, India’s finance minister, reaffirmed the nation’s stance that it will keep purchasing Russian oil because it meets its demands.
Given that India’s exports to the US were approximately $87 billion in 2024, the tariffs represent a serious threat to Indian exports, with estimates indicating possible revenue losses of billions. Experts caution that these taxes may harm India’s export-oriented businesses and jeopardize employment in labor-intensive sectors like jewelry, textiles, and stones.
As India seeks to maintain a delicate balance between the US, Russia, and China through the BRICS alliance, the standoff also confuses geopolitical alignments and runs the risk of weakening the larger US-India strategic partnership.
In a broader diplomatic framework, the Trump administration presents the tariffs as a means of pressuring India to support the US dollar in trade and reduce ties with Russia in order to better line with US geopolitical and economic objectives.
On the basis of national interest, India, however, defends its right to autonomous foreign policy judgments. Additionally, the US Commerce Secretary stated that President Trump has the last say on how to interact with India.
In an effort to negotiate the intricate trade and geopolitical environment, some Indian officials have stated their desire to finalize a bilateral trade agreement with the US by November, notwithstanding the difficulties. In the midst of the tariff dispute, official Indian statements stress protecting national interests and deny false allegations.
The US-imposed tariffs on India’s purchases of Russian oil are at the heart of the US-India trade dispute in 2025. While India defends its economic pragmatism and strategic autonomy, the US expects it to realign with its economic and geopolitical posture or face further punitive tariffs.
With significant ramifications for trade, diplomacy, and wider geopolitical ties in the Indo-Pacific area, the situation is still tight.
