Oil has always been not only a source of energy for India, but it has also been an important pillar of its foreign policy and economic stability. For a country with a population of 140 crore, the question of energy security is directly related to inflation, growth rate and social stability, but as energy trade is becoming a weapon in global politics, India’s oil import is also no longer just an economic decision. The US’s threats of tariffs and sanctions on its trading partners related to Russia and Iran have further increased this sensitivity.

After the Ukraine war, India gave relief to its domestic economy by purchasing cheap crude oil from Russia, but now there is strict monitoring and pressure from America regarding this decision. On the other hand, the American proposal to open Venezuelan oil to India is being considered a major strategic turning point in this entire incident. The question is whether India will be able to take independent decisions for its energy needs or will it have to change its policy according to the global balance of power?

India’s energy dependence and strategic compulsion

India is the third largest oil importer in the world. About 90 percent of the country’s crude oil needs are met through imports. Oil plays an important role in every sector like transportation, power generation, industry, agriculture and logistics. In such a situation, even a slight fluctuation in oil prices in the global market has a direct impact on inflation, rupee exchange rate and government subsidies in India. Before the Ukraine war, India’s oil imports were mainly dependent on Middle-Eastern countries, but after the war, due to Western sanctions, Russia provided crude oil at concessional rates. India took advantage of this opportunity and gave priority to economic stability along with energy security. This decision is making India a sensitive partner in the eyes of America today.

Oil purchases from Russia and US tariff pressure

After the Ukraine war, America and its allies imposed comprehensive economic sanctions on Russia. Although India did not formally participate in these sanctions, it faced constant diplomatic pressure to buy oil from Russia. According to reports, India has purchased crude oil worth more than 140 billion euros from Russia since 2022. US President Donald Trump made this issue more aggressive. He threatened to impose tariffs of up to 500 percent on countries buying oil from Russia, such as India, China and Brazil.

Fear of Iran and 25 percent additional tariff

America has announced to impose 25 percent additional tariff on Iran’s trade partners. India has been an important trading partner of Iran. Be it oil import or strategic projects like Chabahar Port. In such a situation, it is feared that this new tariff may be applicable to India also.

venezuelan oil

The most interesting twist in this entire incident has come regarding Venezuelan oil. America is now ready to sell Venezuelan oil to India. This is the same Venezuela from which India had earlier stopped buying oil due to US sanctions.

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India and America have now reached the lowest level of several decades. India does not seem to get relief from the tariff imposed by US President Donald Trump. According to sources, on Saturday (August 16, 2025), India suffered a major setback when the US postponed the sixth round of the proposed bilateral trade agreement. This meeting was to be held in Delhi from 25 to 29 August. An American official said that the visit would probably be rescheduled later.

Sixth round postponed, shock to India
So far, five rounds of talks have been held between India and America regarding the trade deal. The sixth round of meeting was considered important, but due to its postponement, difficulties have increased for India. This delay will directly affect the tariff as the additional 25 percent penalty tariff i.e. 50 percent fees imposed by the US are going to be implemented from August 27.

American pressure on agriculture and dairy
The US wants it to get more markets in India’s agriculture and dairy sector. But India has made it clear that the interests of farmers will not be compromised. India is an agricultural country and if the American market interferes with the Indian agriculture sector, it will have a big impact on the farmers and the economy.

Future of trade
India and America have been a long time trade partner. The two countries have targeted that the first phase of bilateral trade deal will be completed by September-October 2025. Also, the plan is to increase bilateral trade by $ 500 billion by 2030. Currently, about $ 191 billion is being traded between the two countries.

Tariff’s effect
The US has imposed 25 percent tariff on India since August 7. Apart from this, due to purchasing crude oil and military equipment from Russia, an additional 25 percent punitive tariff has also been imposed on India, which will be applicable from August 27. This will affect both India’s exports and imports.

Indo-US business figures
According to the latest Commerce Ministry data, India’s exports to the US rose by 21.64% to $ 33.53 billion between April-July 2025. At the same time, imports from the US rose 12.33% to $ 17.41 billion during this period. During this period, America remained India’s largest trading partner.