India, currently the world’s second-largest importer of Russian crude, now faces a direct threat to its export economy. With Russian barrels accounting for nearly half of its total intake in recent months—peaking at 2.8 million barrels per day in July—New Delhi’s energy strategy is on a collision course with Washington’s new trade policy. While analysts expect intake to stabilize slightly above 2 million barrels daily, the legal authority to apply punitive tariffs creates immediate uncertainty for bilateral trade negotiations.

New Delhi has signaled its intent to prioritize energy security for its 1.4 billion citizens, with the Foreign Ministry stating it will continue to pursue diversified sourcing. However, the economic reality is stark: cutting Russian supply to avoid U.S. tariffs would force Indian refiners to secure more expensive alternatives, risking price hikes for consumers ahead of critical state elections. As Michael Kugelman of the Atlantic Council noted, the timing of this legislation complicates months of delicate trade talks, leaving the Indian government to balance its urgent energy needs against the threat of significant retaliatory duties on its exports.