President Donald Trump is signalling a renewed warning to India against any plans to back away from buying oil from the Russian government in defiance of U.S. sanctions. He said the U.S. could easily jack up taxes on Indian goods if it does not continue importing large amounts of oil and natural gas from Russia. Trump left no doubt where he stands on the issue, telling reporters aboard Air Force One as he flew back to Washington on Sunday that he’d like India’s Prime Minister Narendra Modi to shift his country’s energy policy in order to make the U.S. “happy.”
“Make Me Happy”: Trump’s Personal Threat
In a blunt remark, Trump spoke of his relationship with Prime Minister Modi but said personal friendship wouldn’t come in the way if he had to use trade as a weapon. “Modi is such a great guy,” Trump said. “He knew it made me unhappy, and it was important for him to make me happy.”
The two countries do so much business together that the United States, Trump noted, can raise tariffs, essentially a higher tax on imported products, “very fast.” This is not just some future threat: The United States already doubled tariffs on many Indian goods to 50% last year as a “penalty” for India’s continued trading with Russia.
Russians; we are now threatening similar retaliation against Germany, another NATO ally that has made clear it wants its military forces to do business with any nation it chooses. Trump’s new remarks raise the spectre of such taxes potentially rising further were India to continue drawing oil if it isn’t also able to reduce imports.
India’s Balancing Act
India has been in a tricky spot between Washington and Moscow for two years now. Once the war denuded Ukraine, India emerged as one of the largest purchasers of Russian oil it could get at a bargain-basement price. This allowed India to keep its petrol prices stable and keep its fast-growing economy chugging.
But the pressure from the Trump administration is beginning to take a toll. Recent data indicate that India’s imports of Russian oil have begun to fall below 1 million barrels per day. India has also been purchasing significantly more oil from the United States to prove itself a loyal trade partner.
India’s exports to the United States increased in November 2025, despite the 50% tax. Indian companies have been struggling to come up with creative ways to remain competitive, despite the hefty “Trump Tax” on their goods. Indian authorities have stood their ground, insisting that they must prioritise putting energy into their own power plants first, but are also quietly imploring oil refiners to pay very close attention to precisely how much crude they buy from Russia.
What’s Next for Trade?
The two nations are now locked in talks to agree on a new trade deal that would reduce these high taxes. Indian Commerce Secretary Rajesh Agrawal travelled to Delhi just last month for a round of meetings with U.S. officials, seeking to find some middle ground.
“Trump says he can raise tariffs ‘very quickly,’ but India is also an important partner in Asia,” Krishnamachar said. For now, the world is waiting to see whether Prime Minister Modi will try to appease Washington in a big way or whether India remains adamant about its right to buy oil from wherever it wants. As the 2026 trade season kicks off, the “oil-for-tariffs” war continues to be one of the prime challenges for the India-U.S. relationship.
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