NEW DELHI: India’s exports of petroleum products like diesel and jet fuel to the United States remain unaffected by the latest tariff action announced by US President Donald Trump, despite his renewed criticism of India’s growing energy and defence ties with Russia.
On Wednesday, Trump announced a 25 per cent tariff on Indian goods, warning of further penalties over India’s military purchases from Russia and its position as one of Moscow’s key energy buyers. However, the executive order that followed imposed the 25 per cent tariff only on selected goods, exempting several strategic sectors.
Among the spared items were petroleum products, pharmaceuticals (both finished dosages and APIs), electronics, and ICT goods like smartphones and semiconductors. Notably, no specific penalty has been announced so far over India’s oil trade with Russia.
According to official trade data, India exported 4.86 million tonnes of petroleum products to the US in FY25 (April 2024–March 2025), valued at over $4 billion. Reliance Industries Ltd emerged as the top exporter. Analysts said fuel exports being exempt from the tariff ensures continuity for Indian refiners.
“Fuel trade continues uninterrupted for now. But whether this changes in the future is anyone’s guess,” said one analyst, pointing to the lack of clarity on the threatened penalty over Russian energy ties.
Russia now India’s biggest crude supplier
India’s pivot to Russian energy has been stark. From just 0.2 per cent of crude oil imports before the Ukraine war, Russia now supplies 35–40 per cent of India’s crude, surpassing Iraq and Saudi Arabia.
In July 2025 alone, Russian crude accounted for 36 per cent of India’s total oil imports, as refiners continued to capitalise on price discounts.
Before the war, India sourced most of its oil from West Asia. But the Ukraine conflict shifted global oil flows, and Russian Urals crude—at one point discounted by as much as $40/barrel to Brent—offered a lucrative arbitrage.
Although discounts have since narrowed to below $3/barrel, India still imports 1.4 to 2.15 million barrels per day from Russia, with a large portion refined and exported to fuel-deficit markets like the US and EU.
On social media, Trump slammed India’s arms and oil deals with Russia, stating:
“India will therefore be paying a tariff of 25 per cent, plus a penalty for the above (Russian purchases), starting on August First.”
But the executive order did not outline any specific penalties, suggesting the administration may still be weighing its options.
EU’s curbs raise future risks
The EU’s earlier bans on Russian crude and refined fuels had opened a window for Indian refiners to act as a middleman—importing discounted Russian oil, refining it, and exporting fuels westward.
However, the EU recently banned refined products made from Russian-origin crude and slashed its price cap on Russian oil from $60 to $7.6, pegged at 15 per cent below global rates. This could close the arbitrage window, creating challenges ahead.
For now, though, Indian fuel exports to the US remain safe—at least until Washington makes up its mind on how far it wants to push New Delhi on its Moscow ties.
