India reviews Trump diesel deal with Russia as US tariff threats loom

New Delhi is reviewing the United States' decision to purchase Russian diesel, examining how Washington intends to justify the imports while threatening India with punitive 100 per cent tariffs for buying Russian crude.

US President Donald Trump announced the supply arrangement with Russian President Vladimir Putin, saying Russia will immediately send more than 300,000 tonnes of diesel, followed by 500,000 tonnes in November, another 1 million tonnes shortly after, and potentially a further 3 million tonnes depending on refinery output. Trump framed the move on Truth Social as an urgent measure to cut fuel costs for American truckers, farmers and ranchers.

Yet the White House has repeatedly warned it could penalise India under the Russia and Iran Sanctions Act for its own extensive purchases of Russian energy. Senior Indian government sources indicated that Washington appears set to carve out a legal concession or waiver for itself, creating what officials view as a clear double standard.

What the US policy shift means for India

Indian officials have argued in repeated rounds of talks with US counterparts that imposing secondary sanctions would severely damage bilateral ties. Relations are already managing friction over trade negotiations and Washington's warming engagement with Pakistan.

Prime Minister Narendra Modi spoke with Trump on 30 September in a phone call described by officials as cordial. Even so, the US administration has taken no final decision on granting India a formal waiver under the sanctions law. The uncertainty leaves Indian refiners navigating persistent regulatory risk while the White House secures its own supply from Moscow.

Energy infrastructure and ceasefire pressure

The American push for Russian diesel arrives amid acute pressures on the global refined product market. Bottlenecks through the Strait of Hormuz and repeated Ukrainian drone strikes on Russian refineries have tightened fuel supplies across Europe and North America, pushing retail prices higher weeks ahead of US midterm elections.

Trump has pressed Ukrainian President Volodymyr Zelenskyy to stop targeting Russian oil and gas infrastructure, arguing that an end to strikes on energy facilities would stabilise global pricing. The shifting American position aligns closely with the practical realities India has faced since 2022: maintaining uninterrupted flows of crude and agricultural goods through the Black Sea and Eurasian trade corridors is critical to keeping domestic inflation in check.

Whether Washington's deal with Moscow leads to an official carve-out for New Delhi remains unanswered. For now, Indian trade and diplomatic officials are watching to see what legal mechanism the White House uses to bring Russian barrels into American ports without breaching its own sanctions regime.