Sorry Mr. Trump… While You Punished India with Steep Tariffs for Buying Russian Oil, America Made Billions from the Ukraine War
In August 2025, U.S. President Donald Trump imposed a 50% tariff on Indian exports to the United States, doubling the existing 25% levy as a punitive measure for India’s continued purchase of discounted Russian crude oil. The move, framed as an effort to curb Russia’s war chest in the ongoing Ukraine conflict, sparked widespread controversy and accusations of hypocrisy. While Trump accused India of “profiteering” and indirectly fueling Russia’s war machine, critics have pointed out that the U.S. has itself reaped billions in economic gains from the Ukraine war through arms sales, energy exports, and other trade. This blog delves into the complexities of Trump’s tariffs, India’s energy strategy, and the irony of America’s own war-related profits.
The Tariffs: A Punitive Strike on India
On August 27, 2025, Trump followed through on his threat to impose a 50% tariff on Indian goods, with 25% explicitly tied to India’s purchase of Russian oil. The decision, announced via Truth Social, accused India of “not caring” about the casualties in Ukraine and profiting by reselling Russian oil on the global market. U.S. Treasury Secretary Scott Bessent claimed India made $16 billion in excess profits from this “arbitrage,” while White House trade advisor Peter Navarro went further, labeling the Ukraine conflict “Modi’s war” and accusing India of acting as a “laundromat for the Kremlin.”
The tariffs have hit India’s economy hard, with analysts estimating a potential $37 billion loss in exports to the U.S., particularly in labor-intensive sectors like textiles, gems, jewelry, and seafood. Goldman Sachs warned that sustained levies could reduce India’s GDP growth to below 6%, down from a projected 6.5%. The Federation of Indian Export Organisations reported that textile manufacturers in cities like Tirupur and Surat have halted production due to cost competitiveness issues, as rival exporters from Vietnam and Thailand gain an edge.
India’s External Affairs Minister S. Jaishankar and Commerce Minister Piyush Goyal have slammed the tariffs as “unjustified,” emphasizing that India’s oil purchases are driven by national interests, ensuring affordable energy for its 1.4 billion people. The Indian government has also highlighted that the U.S. encouraged India to buy Russian oil early in the Ukraine conflict to stabilize global prices, a stance echoed by former U.S. Ambassador Eric Garcetti in 2024.
India’s Russian Oil Strategy: Necessity, Not Opportunism
India’s reliance on Russian oil surged after the 2022 Ukraine invasion, with Russian crude now accounting for nearly 40% of India’s total oil imports, up from less than 1% pre-war. This shift was driven by economics: Russian oil, sanctioned by Western nations, is sold at discounts of up to $7 per barrel below global benchmarks, saving India billions. For instance, India purchased about $13.39 lakh crore worth of Russian oil between 2022 and 2025, trailing only China’s $193 billion. Stopping these imports could increase India’s oil bill by $9-12 billion annually, potentially tripling global crude prices to $200 per barrel and spiking domestic fuel costs.
Indian officials argue that these purchases are not profiteering but a necessity to maintain energy security. Refineries, led by Reliance Industries, operate independently and prioritize cost-effective sources. Moreover, India’s imports have helped keep global oil prices in check, benefiting Western consumers as well. The Ministry of External Affairs has pointed out that halting Russian oil purchases would disrupt supply chains and harm India’s economy without significantly denting Russia’s revenue, as China and other buyers like Turkey would step in.
America’s War Profits: A Hypocritical Double Standard?
While Trump’s administration has singled out India, critics argue that the U.S. has profited significantly from the Ukraine war, undermining its moral high ground. Since Russia’s invasion in 2022, the U.S. has emerged as a major beneficiary through:
- Arms Sales: The U.S. has provided over $50 billion in military aid to Ukraine, much of which funds American defense contractors like Lockheed Martin and Raytheon. The war has boosted demand for U.S.-made weapons, with countries like Poland and Germany increasing purchases, contributing to a $206 billion global arms market in 2024. Posts on X have highlighted this, with one user stating, “While Trump slams India, U.S. defense stocks are soaring thanks to Ukraine.”
- Energy Exports: The U.S. has capitalized on Europe’s shift away from Russian gas, increasing liquefied natural gas (LNG) exports to the EU, which reached $37 billion in 2024. India itself imported $6.6 billion worth of U.S. energy in the first half of 2025, a 70% jump from the previous year, yet this hasn’t softened Trump’s stance.
- Russian Imports: Despite sanctions, the U.S. continues to import Russian goods, including $927 million in fertilizers, $755 million in uranium, and $594 million in palladium in the first half of 2025. These transactions, worth over $3 billion in 2024, have drawn criticism for funding Russia’s economy while India faces penalties for similar trade.
The House Foreign Affairs Committee Democrats have called out this double standard, noting that China, the largest buyer of Russian oil, faces no tariffs, while India’s strategic partnership with the U.S. is being “sabotaged.” They argue that Trump’s focus on India is less about Ukraine and more about domestic political posturing and reducing the U.S. trade deficit with India, which stands at $45 billion.
The Geopolitical Fallout
Trump’s tariffs have strained U.S.-India relations, pushing New Delhi closer to Russia and China. Prime Minister Narendra Modi’s meetings with Vladimir Putin and Xi Jinping at the Shanghai Cooperation Organisation summit in 2025 underscored this shift, with Modi reaffirming India’s “special” relationship with Russia. Former U.S. diplomat John Bolton warned that Trump’s policies are “shredding” decades of efforts to align India with the West, driving it toward BRICS and non-Western powers.
Ironically, the tariffs have backfired on their stated goal. Russia has slashed oil prices further, making its crude even more attractive to India, which resumed purchases after a brief pause. Moscow’s oil exports to Asia, particularly India and China, have risen, with Russia earning an additional $310 million in a single week in August 2025. This has strengthened black market networks and Russia’s economic resilience, undermining Trump’s strategy to isolate Moscow.
The Human and Economic Cost
While geopolitical games play out, the tariffs are hurting ordinary Indians and Americans. In India, exporters face shrinking order books, with small businesses in textiles and gems hit hardest. In the U.S., consumers are bracing for higher prices as Indian goods like pharmaceuticals and electronics become costlier. Analysts warn that the tariffs could fuel inflation in the U.S., with Clayton Seigle of the Center for Strategic and International Studies noting that they “hurt the United States’ economy in a material way.”
Meanwhile, the Ukraine war continues, with over 300,000 soldiers and civilians killed, as per Navarro’s estimates. India’s Congress MP Shashi Tharoor has argued that singling out India is a “policy error,” given that China, Turkey, and Europe engage in far larger trade with Russia. He emphasized that India’s actions are driven by economic necessity, not indifference to Ukraine’s plight.
Conclusion
Trump’s decision to impose steep tariffs on India for buying Russian oil has exposed a stark double standard. While India secures affordable energy for its 1.4 billion people, the U.S. has profited handsomely from the Ukraine war through arms and energy sales, all while continuing its own trade with Russia. The tariffs, far from weakening Russia, have strengthened its oil exports and pushed India closer to Moscow and Beijing, fracturing a key strategic partnership. As global oil prices and geopolitical tensions hang in the balance, the irony is clear: Trump’s attempt to punish India has not only failed but highlighted America’s own war-driven gains. The road to peace in Ukraine, it seems, does not run through New Delhi but through a more consistent and equitable global approach.
