New Delhi: The United States has imposed sweeping 50% tariffs on Indian exports citing India’s continued purchase of Russian oil, while China, the world’s largest importer of Russian crude, remains untouched. The move has raised questions over Washington’s strategy and the reasons behind sparing Beijing despite its higher dependence on Moscow’s discounted energy supplies.

India hit with 50% tariffs

India imported around 88 million tonnes of Russian crude last year, benefitting from discounted rates since the Ukraine conflict. The US administration has linked this to the steep tariffs now imposed on Indian goods, ranging from textiles and leather to gems, jewellery, shrimp, and furniture. Officials estimate that nearly ₹3 lakh crore (about $37 billion) worth of exports could be affected, putting pressure on labour-intensive sectors that form a large part of India’s overseas trade.

Why China is not targeted

China’s Russian crude imports were even higher at 109 million tonnes, yet it has avoided similar US penalties. Analysts say this is not due to trade volumes but due to geopolitical calculations. Washington remains cautious in its approach towards Beijing, given the scale of economic interdependence and ongoing negotiations in other areas. Former US President Donald Trump has also suggested that tariffs on China could come later, leaving the focus on India for now.

Savings and risks for India

India’s decision to buy cheaper Russian oil allowed it to save about $17 billion in energy costs last year. However, these gains may now be neutralised by export losses due to higher tariffs. Sectors such as garments, handicrafts and marine products face immediate challenges, and exporters fear losing market share in the US, which is India’s largest single export destination.

Broader consequences

Beyond trade, the tariff escalation threatens to strain India-US ties at a strategic level. Cooperation in defence, technology, and the Quad grouping may be undermined by the dispute. While India insists its energy imports are driven by national interest, Washington’s decision has introduced new uncertainty in the relationship.

Conclusion

The contrasting treatment of India and China underlines that tariff decisions are shaped as much by geopolitics as by economics. For India, the challenge will be to balance energy security with protecting its export markets, while navigating the diplomatic fallout with the United States.