The United States could hit Russia’s war chest far more effectively by targeting its energy sector instead of penalising Indian exports, experts have argued, as Washington’s new tariff wall against India comes into force this week.
From August 27, most of India’s $86.5 billion exports to the US will face an additional 25 per cent duty, taking total tariffs to over 50 per cent (including the pre-existing most-favoured-nation tariffs) in many cases.
Yet petroleum products — one of India’s biggest export items — continue to attract only the basic 6.9 per cent most favoured nation (MFN) duty, shielding US consumers from oil price shocks, according to think tank Global Trade Research Initiative (GTRI).
Data accessed by The Telegraph from the Centre for Research on Energy & Clean Air (CREA) show that between January 2024 and June 2025, the US imported $3.1 billion worth of oil products refined from Russian crude at three Indian refineries, generating €1.3 billion in revenue for the Kremlin.
Noting that there has not been a reduction in India’s imports of Russian crude oil despite the announcement of Trump’s secondary tariffs till mid-August, Isaac Levi of CREA said: “The US could much more effectively constrain the Kremlin war-chest by directly targeting the Russian energy sector rather than implementing higher tariffs on the export of all goods from countries like India.”
The measures suggested by Levi included the US ramping up sanctions on Russia’s ‘shadow’ tankers, prohibiting US companies from continuing to support the Russian energy sector and banning the import of oil products made from Russian crude.
His suggestion was echoed by India’s external affairs minister S Jaishankar, who said nations having a problem buying oil or refined products from India should refrain from doing so. “Nobody forces you to buy it. But Europe buys, America buys, so you don’t like it, don’t buy it,” Jaishankar commented on Saturday.
Not the biggest
China is by far the largest buyer of Russian crude, followed by India, the EU and Turkey. These 4 buyers lift 97 per cent of Russian crude, the Ural blend (see chart). GTRI founder Ajay Srivastava noted that NATO allies imported billions in Russian oil, fertilisers, and metals, and even the US quietly bought $3.3 billion in Russian goods, including strategic minerals.
“The additional 25 per cent US tariff for Indian oil purchases is not just unjustified — it’s hypocritical. China, the world’s largest buyer of Russian crude at $62.6 billion in 2024, faces no such penalty,” Srivastava said.
After Trump accused India of funding the Kremlin’s war, two top-ranking officials, Treasury Secretary Scott Bessent and White House Trade Adviser Peter Navarro, had been particularly critical of India’s purchase of Russian crude. On Friday, Navarro argued India did not need the Russian oil, “It’s a refining profiteering scheme. It’s a laundromat for the Kremlin. That’s the reality of that.” Bessent, too, had argued that some of the richest families of India profited from Russian crude but did not name them.
Sharp jump
India’s purchase of Ural crude spiked in 2022 after Russia invaded Ukraine because it came to market cheaper than other sources, such as West Asia. Three refineries of India have processed and re-exported Russian crude the most, viz, Jamnagar of Reliance, Vadinar of Nayara and New Mangalore of MRPL.
Data accessed from Kpler, a global real-time data and analytics provider, shows Russian crude import by India jumped sharply from 1.1 per cent in 2022 to 37.7 per cent of total imports in 2024. It has stayed at 36.6 per cent till July 31, and Jaishankar’s comment demonstrates no possibility of abating.
“That’s our right. In my business, we would say that’s what strategic autonomy is about,” the EAM argued on Saturday. “We are buying (Russian) oil to stabilise the oil market. Yes, it is in our national interest. We have never pretended otherwise, but we also say it is in global interest,” he added.