NEW DELHI – President Donald Trump signaled on January 4 that the United States stands ready to escalate tariffs against India if it fails to rein in purchases of Russian oil, heightening stakes in ongoing trade discussions that show no signs of breakthrough.
Speaking to reporters on Air Force One, Trump described Prime Minister Narendra Modi as “a good guy” aware of U.S. dissatisfaction. “He knew I was not happy, and it was important to make me happy,” Trump said, adding in response to queries on India’s oil deals: “They do trade, and we can raise tariffs on them very quickly.”
No immediate statement came from India’s commerce ministry. Trump’s latest salvo follows his administration’s 2025 doubling of import tariffs on Indian products to 50 percent, a direct reprisal for New Delhi’s heavy reliance on cut-rate Russian crude.
The rhetoric rattled investors: India’s IT index slid 2.5 percent on January 5, touching a more-than-monthly low amid apprehensions that frayed ties could scuttle a vital U.S.-India trade agreement.
Accompanying Trump, Republican Senator Lindsey Graham, a staunch ally, touted U.S. sanctions and tariffs as key to trimming India’s Russian oil flows. Graham supports a bill empowering tariffs up to 500 percent on nations like India that persist in such trades. “If you are buying cheap Russian oil, you keep Putin’s war machine going,” he declared, noting the measures equip the president to enforce “a hard choice.
“Graham attributed India’s “substantially less” Russian buys squarely to Trump’s policies, though analysts highlight risks in New Delhi’s measured response. Ajay Srivastava, head of the Global Trade Research Initiative, pointed out that exports already bear 50 percent U.S. duties with 25 percent pegged to crude volumes. Refiners have dialed back post-sanctions, he noted, but not to zero, trapping India in a “strategic grey zone.” “Ambiguity no longer works,” Srivastava pressed, advocating a definitive position on Russian oil while warning that full cessation might merely redirect U.S. leverage elsewhere, compounding export declines of over 20 percent from May to November 2025, despite a November surge.
India has kept diplomacy restrained, calling for talks after the U.S. captured Venezuelan President Nicolás Maduro on January 3 without pinpointing Washington. To placate concerns, refiners now file weekly reports on Russian and U.S. oil acquisitions. Modi has conferred with Trump at least three times since the tariffs hit, and India’s commerce secretary engaged U.S. counterparts in December 2025, yet impasses endure in their $200 billion-plus trade corridor.