In August, the Trump administration raised U.S. tariffs on India's goods to 50%.
India purchases almost 40% of its crude oil from Russia.
Since the beginning of the war in Ukraine, India substantially increased its oil imports from Russia, taking advantage of the discount offered by Russia to offset the impact of American and European sanctions.
Before Russia started offering discounts, India imported most of its crude oil from the Mideast, primarily Iraq and Saudi Arabia.
After the start of the war in Ukraine, India's oil imports from Russia surged from 0.2% to almost 40%
Russia became the number one oil supplier to India, generating high revenues that are indirectly financing Russian military operations in Ukraine.
India's refineries are selling petroleum products to Europe and Africa with high profit margins.
President Trump has been trying to negotiate a peace deal between Russia and Ukraine for months, and India's trade with Russia is undermining his efforts.
Some political opponents accused him of being too friendly with Russian President Vladimir Putin, arguing that the United States should not negotiate directly with Russia.
The imposition of tariffs on India proves the opposite: by cutting off Russia's main source of income, President Trump is pressuring Putin to reach a peace agreement in Ukraine that is fair to both parties.
India is at a crossroad: either Prime Minister Modi cuts its oil imports from Russia and aligns with the West, or he risks jeopardizing his country’s economic growth in the long term.
India's population surpassed China and its economy is expected to grow more than China in coming years.
India can't sustain such economic growth without the West.
The United States is a major destination for India's exports, which reached almost U.S. $80 billion in 2024.
In addition to the export revenue, India also generates high revenues from remittances by Indian expatriates to their families.
The restrictions on new H1B visas will certainly affect India's immigration to the United States, which is comprised of skilled workers, and reduce India's income from remittances.
Russia's oil discount, which reached $40 per barrel at the beginning of the war in Ukraine, is now substantially reduced.
Currently, U.S. crude oil and liquefied natural gas exporters can be a highly competitive alternative and a reliable source of energy supply to India.
U.S. import tariffs are obliterating India's economic advantage of purchasing oil from Russia. The diversification of India's source of petroleum imports would lead to a reduction of U.S. tariffs, generating substantial benefits for its economy, and boosting India-U.S. bilateral trade.
If Prime Minister Modi chooses to cut oil imports from Russia, abiding to Trump's request, he would pursue India's long-term economic interests.
If instead he will choose to stand with Putin, he would place India on the wrong side of history.
Francesco Stipo is an author and expert in international affairs. He is president of the Houston Energy Club, a member of the National Press Club in Washington D.C. and a Fellow of the World Academy of Art and Science. In 2014, he was invited to join the Bretton Woods Committee. Born in Italy in 1973, Dr. Stipo is a United States citizen. He holds a Ph.D. in International Law, and a Master Degree in Comparative Law from the University of Miami. Read More of Francisco Stipo's Reports — Here.