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\n Indian<\/a> Prime Minister Narendra Modi has been performing a tricky balancing act \u2013 maintaining close partnerships with US President Donald Trump and Russia\u2019s leader Vladimir Putin while insisting his country is a neutral party in the Russia-Ukraine war, to the dismay of Western nations who have sanctioned Moscow.\n <\/p>\n \n But now, it seems, Trump has lost his patience \u2013 demanding that Modi finally pick a side, and using India\u2019s continued purchases of cheap Russian oil as leverage in his trade war.\n <\/p>\n \n The conundrum pits Trump and Modi, two nationalist leaders who have often described their friendship in warm terms, increasingly against each other.\n <\/p>\n \n On Monday, Trump vowed in an interview with CNBC to \u201csubstantially\u201d raise tariffs<\/a> on India \u201cover the next 24 hours\u201d because it\u2019s still buying Russian oil. It\u2019s not clear what the new tariff rate<\/a> would be \u2013 or why he is now taking issue with something India has done for years. But the fresh threat comes after he had already announced a minimum 25% tariff <\/a>on goods coming from India last week.\n <\/p>\n \n \u201cAlso, they have always bought a vast majority of their military equipment from Russia, and are Russia\u2019s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE \u2014 ALL THINGS NOT GOOD!\u201d Trump wrote on Truth Social last week.\n <\/p>\n \n But for Modi, it\u2019s not so simple. While many other countries have scrambled to strike trade deals with the Trump administration, India \u2013 the world\u2019s fourth largest economy \u2013 has pushed back defiantly, saying it is being unfairly targeted and calling the measure \u201cunjustified.\u201d\n <\/p>\n \n The US and Europe, it pointed out, still trade with Russia on other products such as fertilizers and chemicals.\n <\/p>\n \n Here\u2019s what you need to know about why India is reluctant to stop buying Russian oil.\n <\/p>\n \n India has long been reliant on Russia for crude oil to support its booming economy and growing population, now at more than 1.4 billion people.\n <\/p>\n \n The world\u2019s most populous nation is already the third biggest consumer of oil globally, and with India\u2019s consumption rate still growing rapidly<\/a>, it is expected to surpass China by 2030, according to Reuters.<\/a>\n <\/p>\n \n India\u2019s transformation into an economic superpower has uplifted millions of households \u2013 which in turn have bought more cars and motorcycles, driving up the demand for gasoline.\n <\/p>\n \n Russian crude oil accounts for 36% of India\u2019s overall imports, making Moscow the country\u2019s top supplier, according to Muyu Xu, a senior oil analyst at trade intelligence firm Kpler, who cited figures for the first six months of this year.\n <\/p>\n \n After Russia invaded Ukraine in 2022, European nations largely stopped buying Russian oil. It now flows primarily into Asia \u2013 with China, India and Turkey among Russia\u2019s big clients and is a vital revenue stream for Moscow.\n <\/p>\n \n Delhi is buying Russian oil at a heavy discount, \u201cwhich otherwise would not have been given by the traditional oil and gas suppliers,\u201d said Amitabh Singh, associate professor at Jawaharlal Nehru University\u2019s (JNU) Centre for Russian and Central Asian Studies.\n <\/p>\n \n He added that India\u2019s continuing purchases were \u201ca purely economic or commercial decision\u201d \u2013 something Indian authorities have also argued, but which has been met with derision and anger from Ukraine and its supporters.\n <\/p>\n \n While India has diversified its oil sources over the years, cutting out Russian oil entirely would leave a gaping hole that\u2019s hard to replace.\n <\/p>\n \n India imports 80% of its oil needs, and its domestic oil production<\/a> isn\u2019t enough to make up the difference. OPEC, the coalition of the world\u2019s top oil producers, may have \u201csome spare capacity, but it\u2019s difficult to ask them to pump 3.4 million barrels overnight,\u201d said Xu when she spoke to CNN in July, referring to Russia\u2019s daily seaborne exports.\n <\/p>\n \n Its choices have also been limited by other US actions \u2013 India was forced to stop buying oil from Iran and Venezuela after Trump imposed sanctions and threatened tariffs against countries that bought from those places.\n <\/p>\n \n Before it halted its purchases, India had been one of Iran\u2019s biggest clients, buying up to 480,000 barrels per day, according to Reuters<\/a>.\n <\/p>\n \n \u201cWe have our hands tied at the back,\u201d said Singh. \u201cThere is very limited space in which the Indian oil economy or market can operate.\u201d\n <\/p>\n \n For now, he added, it\u2019s unlikely Delhi will bow to Trump\u2019s demands. Modi\u2019s administration will continue navigating trade talks with the US and explore the \u201ctraditional route\u201d of Middle Eastern oil while it works to wean itself off Russian crude \u2013 but this it \u201ccannot do overnight,\u201d said Singh.\n <\/p>\n \n Russia\u2019s oil also feeds India\u2019s economy, which plays a key role in the global oil trade. India argues that its purchases from Russia have kept global oil prices lower, as it\u2019s not competing with Western nations for Middle Eastern oil.\n <\/p>\n \n When the Ukraine-Russia war kicked off during the Biden administration, \u201ceveryone knew that India is buying oil from Russia,\u201d said Singh \u2013 but added that Western nations had tolerated it \u201cbecause they knew that if India is not buying oil from Russia, then inflation will go up.\u201d\n <\/p>\n \n If India switches to importing oil from somewhere else at a higher cost, American consumers will likely feel the hit, too. Some of the Russian crude oil sent to India is then refined and exported back out to other countries \u2013 because sanctions on Moscow don\u2019t include products refined outside Russia.\n <\/p>\n \n It\u2019s a loophole that has benefited both India\u2019s economy and other recipient nations. In 2023, India exported $86.28 billion in refined oil products, making it the world\u2019s second-biggest exporter of petroleum products, according to the National Bureau of Asian Research (NBR).<\/a>\n <\/p>\n \n Some of the biggest buyers of these refined products, made from Russian crude oil, include Europe, the US, and the UK, according to the Centre for Research on Energy and Clean Air (CREA)<\/a>. The independent organization has urged G7 nations to close this loophole, arguing it would disincentivize third countries \u2013 like India \u2013 to import Russian crude.\n <\/p>\n Historic partnership and juggling ties<\/p>\n \n India and Russia\u2019s partnership<\/a> goes beyond just oil and stretches back decades \u2013 another reason it\u2019s not so easy to dismantle.\n <\/p>\n \n India was officially nonaligned during the Cold War between the US and the USSR. However, India began to lean towards the Soviet Union in the 1970s when the US began providing military and financial assistance to India\u2019s neighbor and longtime rival Pakistan. This was when Russia started providing arms to India.\n <\/p>\n \n In recent years, India has drawn closer to Washington, and ramped up arms purchases from America and its allies, including France and Israel.\n <\/p>\n \n Still, India remains the top recipient of Russian arms, according to SIPRI. And Modi remains friendly with Putin \u2013 even paying a controversial visit<\/a> to Moscow last year, with the Russian president greeting his counterpart with a hug and personally driving him around.\n <\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/08\/2025-07-11t084517z-1962930646-rc2jz6a3qjkl-rtrmadp-3-iea-oil-russia.JPG\")
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