U.S. Hints at Tariff Rollback for India After Sharp Drop in Russian Oil Imports

U.S. Treasury Secretary Scott Bessent on Friday indicated that Washington could roll back an additional 25% tariff imposed on Indian goods, pointing to a sharp fall in India’s purchases of Russian crude oil as evidence that U.S. pressure is having the intended effect.

Speaking in an interview with Politico at the World Economic Forum in Davos, Bessent said the collapse in Indian refinery purchases of Russian oil had validated the Trump administration’s strategy of using tariffs as leverage.

“Indian purchases by their refineries of Russian oil have collapsed. So that is a success,” he said.

While stressing that the additional 25% tariffs linked to Russian oil imports remain in place, Bessent added that he could “imagine there is a path to take them off,” a comment that markets and policymakers quickly read as an opening for tariff relief.

How trade tensions escalated

The dispute traces its roots to the geopolitical fallout from Russia’s invasion of Ukraine and the West’s subsequent effort to restrict Moscow’s energy revenues. While the U.S. and Europe moved to impose sweeping sanctions on Russian oil, India adopted a more pragmatic stance, sharply increasing its purchases of discounted Russian crude from 2022 onward. That strategy helped cushion India against global energy price shocks and inflation, but it also placed New Delhi at odds with Washington’s broader sanctions regime.

Tensions reached a new peak in August, when President Donald Trump doubled tariffs on Indian goods to 50%. The increase included a specific 25% levy explicitly tied to India’s continued imports of Russian oil. The White House framed the move as both an economic and strategic response, arguing that India’s purchases were indirectly helping to finance Russia’s war effort.

Trump warned at the time that tariffs could rise further if India failed to change course, underscoring his administration’s willingness to weaponize trade policy in pursuit of geopolitical goals. The tariffs hit a wide range of India’s exports and raised concerns about longer-term access to the U.S. market, one of its most important trading partners.

But recent data suggest India has begun recalibrating. Reuters reported on Friday that India’s imports of Russian oil in December fell to their lowest level in two years. As Russian volumes declined, supplies from OPEC producers rose, pushing OPEC’s share of India’s crude imports to an 11-month high.

That shift has been closely watched in Washington, where officials have argued that sustained pressure could eventually alter even large, price-sensitive energy markets. Bessent’s comments indicate the administration sees the December data as confirmation that tariffs and political pressure are influencing Indian refinery behavior.

Still, the reduction does not mean India has abandoned Russian oil entirely. Analysts note that refiners remain sensitive to price differentials and supply reliability, and future import patterns will depend on global oil prices, freight costs, and the availability of alternative supplies.

What tariff relief would mean

Any rollback of the additional 25% tariff would be significant for India’s exporters, who have faced higher costs and uncertainty since the August escalation. It would also mark a rare instance of the Trump administration signaling a willingness to ease tariffs in response to policy changes by a trading partner, reinforcing the idea that tariffs are being used as negotiating tools rather than permanent barriers.

Easing tariffs could help the U.S. stabilize relations with India at a time when Washington is seeking to deepen strategic and economic ties in the Indo-Pacific. India is a key partner in efforts to counterbalance China’s influence, and prolonged trade friction risks complicating that broader agenda.

But despite Bessent’s conciliatory tone, there is no immediate timeline for lifting the tariffs, and the final decision rests with President Trump. U.S. officials have repeatedly emphasized that trade measures tied to national security and foreign policy will be reviewed cautiously and incrementally.

However, Bessent’s statement indicates that Washington believes its pressure campaign has delivered results, and India’s recent oil import data have strengthened the case for at least partial relief. Analysts note that what will follow will depend on whether the administration is satisfied that India’s shift away from Russian crude is durable—and politically defensible at home.