WASHINGTON DC –  The White House has delivered its most forceful economic blow yet in the global standoff against Russia, with President Donald Trump on Tuesday morning signing an Executive Order to impose a sweeping 25% tariff on all goods imported from India.

The move, effective in 21 days, is a direct response to India’s “indirectly importing Russian Federation oil,” which the administration says undermines US and allied efforts to isolate Moscow.

The executive order, titled “Addressing Threats to the United States by the Government of the Russian Federation,” broadens the scope of a national emergency declared in 2022.

It explicitly states that India’s oil purchases, regardless of whether they are direct or through intermediaries, pose an “unusual and extraordinary threat to the national security and foreign policy of the United States.”

A new front and implications

While previous US actions focused on directly sanctioning Russia, this is the first time Washington has used tariffs to penalize a key strategic partner for its trade with Moscow.

The order grants the Secretary of Commerce the authority to investigate other countries and recommend similar tariffs if they are found to be importing Russian oil.

Economists and trade analysts are now scrambling to assess the full impact. US officials have acknowledged that the tariffs could significantly disrupt bilateral trade, which reached over $180 billion last year.

India’s exports to the US are concentrated in vital sectors like pharmaceuticals, textiles, gems and jewelry, and IT services, making them highly vulnerable to the new duty.

While some Indian industry bodies have tried to downplay the macroeconomic effect, specific sectors are bracing for significant losses. For example, a recent study by the PHD Chamber of Commerce and Industry estimates that the engineering sector alone could face a hit of nearly $2 billion.

India’s defiant stance

India has pushed back against the US pressure, with the government calling the targeting “unjustified and unreasonable.” In a statement on Monday, India’s Ministry of External Affairs argued that its purchase of Russian oil is a “necessity compelled by global market conditions” and is essential to providing affordable energy for its citizens.

The Indian government has previously stated that its energy strategy has actually helped stabilize global oil prices by ensuring a buyer for Russian crude that would otherwise have been destabilizing the market.

The road ahead

Trump’s Executive Order offers a narrow path for de-escalation. It states that the tariffs could be modified if India takes “significant steps” to align its policies with the US and “address the national emergency.”

However, the document also allows for further escalation, warning of additional action if the tariffs are not effective or if India retaliates.The timing of this announcement, just days before a new round of trade negotiations were scheduled between the two countries, casts a long shadow over future diplomatic efforts.

While the US is seeking greater market access in India for its agricultural and dairy products, New Delhi has been resolute in its stance to protect its domestic farmers.

The new tariffs now put those sensitive negotiations on hold and threaten to push the world’s two largest democracies further apart at a time of heightened global instability.

Expert warns of critical blow to Russia

The new executive order comes amidst high-stakes diplomatic efforts, including a meeting in Moscow between Trump’s special envoy, Steve Witkoff, and Russian leader Vladimir Putin.

For Ukraine, the pressure on India is seen as a critical step in a broader strategy to cripple Russia’s ability to finance its war.

“For Russia, India and China are critical buyers of its crude oil,” said Yuriy Boyechko, the CEO of the humanitarian organization Hope for Ukraine, speaking to the Kyiv Post. “About 43% of Russia’s oil exports go to China and 38% to India – together accounting for 81% of all Russian oil sales. If China continues buying Russian oil but India stops, Russia would lose 38% of its oil export revenue. That’s more than a third – a significant reduction in budget revenues and a major financial blow to Russia.”

Boyechko underscored the financial pressure on the Kremlin: “Russia is spending nearly $1 billion per day on its war in Ukraine,” he said. “If President Trump can pressure India to stop buying Russian oil, Putin could run out of money to fund the war very quickly, since oil exports are Russia’s primary source of revenue.”

The expert also warned against Russian attempts to offer a deceptive de-escalation: “During their eleventh-hour meeting with Steve Witkoff, the Russians will likely do whatever it takes to delay secondary sanctions in order to ease Trump’s pressure on India in particular,” Boyechko said. He referenced a recent media report suggesting Russia might propose a temporary “air truce” without a full ceasefire.

“If President Trump and President Zelensky agree to such a proposal, it would be a serious mistake,” Boyechko warned. “Russia would likely use the air truce to build up its stockpiles of ballistic missiles and drones – funded by continued oil revenues – and then use those weapons to target Ukrainian civilians during the harsh winter months.”