U.S. President Donald Trump warned Sunday that U.S. could raise tariffs on India if New Delhi fails to reduce its imports of Russian oil, intensifying pressure as trade negotiations stall.
“(Prime Minister Narendra) Modi is a good guy. He knew I was not happy, and it was important to make me happy,” Trump told reporters aboard Air Force One.
“They do trade, and we can raise tariffs on them very quickly,” Trump said in response to a question on India’s Russian oil purchases.
Trump’s comments follow months of trade negotiations after the U.S. doubled import tariffs on Indian goods to 50% last year as punishment for its heavy buying of Russian oil.
Market Reaction
Indian markets reacted on Monday, with the information technology stock index falling about 2.5% to its lowest in more than a month, as investors worried that strained trade relations could further delay a U.S.-India trade deal.
Republican Senator Lindsey Graham, a close Trump ally travelling with him, said U.S. sanctions on Russian oil companies and higher tariffs on India had helped curb Indian oil imports.
Graham is backing legislation to impose tariffs of up to 500% on countries such as India that continue to buy Russian oil.
Future Concerns
Trade experts warn, however, that New Delhi’s cautious approach risks weakening its position.
Ajay Srivastava, founder of trade think tank Global Trade Research Initiative, said Indian exports already face a 50% U.S. tariff, with 25% linked to purchases of Russian crude.
While Indian refiners have cut imports after sanctions, he said, buying has not stopped entirely, leaving India in a “strategic grey zone.”
“Ambiguity no longer works,” Srivastava said, urging India to clearly state its stance on Russian oil. He warned that even a complete halt may not end U.S. pressure, which could shift to other trade demands, and that higher tariffs risk deeper export losses.
Modi has spoken to Trump at least three times since the tariffs were imposed. India’s commerce secretary met U.S. trade officials last month, but talks remain unresolved.
(With inputs from Reuters)
