The days of “Howdy and Modi” are over — at least for the immediate future.
Six years on from the gigantic rally in Houston, Texas and then in Gujarat, India, where US President Donald Trump and Indian Prime Minister Narendra Modi held hands together before an explosive crowd, the two are now fighting a war of words and tariffs. This is an incredibly destabilising moment for the flourishing and growing US-India relationship, and recovery from here will be difficult, if not impossible, most agree.
And crude oil is central to this feud.
When Western countries, led by the US, began boycotting Russian oil in 2022 in the aftermath of the Russian war on Ukraine, India saw an opportunity. Some 2.6 million barrels per day (bpd) of crude once destined for Europe were now available to India at a sweet discount.
India, which bought next to no oil from Russia in 2021, pounced. And ever since, New Delhi has remained one of Moscow’s biggest customers for crude.
New Delhi’s imports of Russian oil have irked President Trump as he pushes Moscow to strike a deal and end the war with Ukraine
Today, India imports nearly 2m bpd of Russian “sour”, heavy crude, representing 35-40 per cent of its total crude imports. This was a God-gifted opportunity to India, reducing its import bill at a time when its demand for petroleum products was continuing to grow rapidly.
Indian refiners made a killing by processing the discounted Russian crude into fuels, which were then exported to the world at full market price. For three years, Ukraine’s allies did not object to this business, and the strategy looked savvy. Now it is in jeopardy, putting at stake India’s burgeoning relationship with the United States under Trump.
As the US President is striving to tighten the screw on the Russian oil exports and push Moscow to strike a deal and bring an end to the war in Ukraine, India was seen on the radar as a villain. This happened at a time when the Indo-US relationship was already passing through tough times. Many issues were afflicting the relationship.
After five rounds of trade talks, India and the US were no closer to a deal. This was enough to irk the US. To put additional pressure on India at the bargaining table, President Trump began openly siding with Pakistan, India’s archrival on the geopolitical stage.
Pakistan and the United States reached a trade agreement, and while announcing the trade agreement, President Trump also added that a US oil major, to be selected, would help Pakistan unearth its massive (offshore) oil reserves. Trump also teased India by saying that maybe one day, India may buy oil from Pakistan.
Indian refiners made a killing by processing the discounted Russian crude into fuel, which were then exported to the world at full market price
In one of his other social media posts, he also said that India had a “dead economy.” President Trump’s words piqued India. Images in February of Indians deported by the US on military planes, their hands and legs shackled, horrified the country just days before Modi went to see Trump, seeking to stave off high tariffs.
The Indo-US relationship was also seriously tested in late 2023 when the US said it had foiled a plot with Indian links to kill a Sikh separatist leader on US soil. New Delhi has denied any official connection to the plot.
Further, while Trump continued to emphasise that he was instrumental in the ceasefire between India and Pakistan, Modi’s India emphatically continued denying it.
All this was enough to annoy the mercurial US President. The import of Russian oil turned out to be the last nail in the coffin. On August 6, President Donald Trump slapped an extra 25pc tariff on India — because Indians were continuing to buy Russian crude in huge volumes, despite the US-led sanctions. That additional tariff raises the total US tariff on Indian imports to 50pc — among the highest imposed by the US.
The new rate will come into effect on August 27, exactly 21 days from the date of the order.
In retaliation, India appears to be taking a firm position. A response from India’s foreign ministry reiterated that the tariff is “unfair, unjustified and unreasonable”. “It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest,” the brief statement read. “India will take all actions necessary to protect its national interests,” it added.
Yet, despite taking a firm public position, Bloomberg reported last week that the Indian government had told state-owned oil refiners to prepare alternatives to Russian crude. A Reuters report also said that two state-owned Indian majors had secured some 22m barrels for delivery in the next couple of months from non-Russian sources.
However, some other sources told Bloomberg that the Indian government is still assessing its position. Two senior Indian officials told The Times on August 2 that there has been no change in policy and that India would continue purchasing oil from Russia.
In the meantime, a Putin-Trump meeting is on the cards — possibly within days, raising expectations for a truce and diplomatic end to the war in Ukraine. What if the two agree on Ukraine, the ongoing war comes to an end, and the sanctions on Russia are lifted? That could mean that the additional 25pc tariff on India would also be gone.
And yes, any such move would take some pressure off Indo-US relations. But to get back to the heyday of Biden or even to the early days of the Trump 2.0 era seems very difficult, if not impossible. The relationship has taken a toll.
The writer is an energy analyst and has delivered talks at the Department of Energy in Washington and the International Energy Agency.
X: @rhusainsyed
Published in Dawn, The Business and Finance Weekly, August 11th, 2025
