The Indian government’s push for a trade deal with the US is facing pressure, with US President Donald Trump warning that he could raise tariffs further if New Delhi does not meet his call to curb purchases of Russian oil.
Talks between the two countries remain inconclusive. Trump told reporters aboard Air Force One on Sunday: “(Prime Minister Narendra) Modi is a good guy. He knew I was not happy, and it was important to make me happy.
“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.”
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India’s commerce ministry did not immediately respond to a request for comment.
Trump’s comments follow months of trade negotiations after the US doubled import tariffs on Indian goods to 50% last year as punishment for its heavy buying of Russian oil.
Concern over delay on trade deal
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 US-India trade deal.
The benchmark BSE Sensex was down 0.38% at 85,439.62, while the broader NSE Nifty 50 index declined 0.3% to 26,250.3, with IT stocks dragging and concerns over additional US tariffs weighed, while positive business updates that reinforced expectations of better quarterly earnings capped some losses.
Republican Senator Lindsey Graham, a close Trump ally travelling with him, said US 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.
“If you are buying cheap Russian oil, (you) keep Putin’s war machine going,” he said, adding that “we are trying to give the President [the] ability to make that a hard choice by tariffs.”
Trump’s actions were the main reasons India was now buying “substantially less Russian oil,” Graham said.
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% US tariff, with 25% linked to purchases of Russian crude.
‘Strategic grey zone’
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 US pressure, which could shift to other trade demands, and that higher tariffs risk deeper export losses.
Separately, India struck a cautious diplomatic stance after the United States captured Venezuela’s President Nicolas Maduro on Saturday, urging dialogue without explicitly naming Washington.
Despite steep tariffs, India’s exports to the US leapt in November, though shipments fell more than 20% between May and November 2025.
As New Delhi seeks to clinch a trade deal with Washington, the government has asked refiners for weekly disclosures of Russian and US oil purchases to address US concerns.
Modi has spoken to Trump at least three times since the tariffs were imposed. India’s commerce secretary met US trade officials last month, but talks remain unresolved.
Reuters with additional editing by Jim Pollard
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