Special Report :
The United States is escalating trade pressure on India for continuing to import, refine, and export discounted Russian crude – transactions that U.S. officials say circumvent sanctions aimed at depriving Moscow of revenue.
At the fulcrum of this geopolitical firestorm is Reliance Industries, headed by billionaire Mukesh Ambani, a key ally of Prime Minister Narendra Modi. With new tariffs in place and secondary sanctions under consideration, Reliance’s global refining juggernaut faces heightened exposure.
Effective August 1, 2025, former President Donald Trump imposed a flat 25 per cent tariff on all Indian exports to the U.S., plus an unspecified penalty linked to India’s ongoing trade in Russian energy and defense equipment.
This policy shift significantly tilts the playing field, placing Indian exporters at a pronounced disadvantage – especially in comparison to competitors like Bangladesh, led by University of Vanderbilt PHD holder, Nobel Laureate Dr. Yunus, which successfully managed to negotiate a lower US tariff from 37 per cent to 20 per cent.
India imported an estimated $275 billion worth of Russian crude in the past year, and its exports of refined petroleum topped $50 billion, as per The New York Times (July 31, 2025).
The Jamnagar Refinery, operated by Reliance in Gujarat, converted much of that Russian crude into diesel, aviation fuel, and other products, which are then sold in the US, Europe, and beyond.
India indirectly is effectively financing Russian’s war against Ukraine that has caused 100s of thousands of casualties according to US president Donald Trump.
Over the two decades leading up to 2018-19, Iran was one of India’s top crude suppliers. At its peak in 2007-08, Iranian oil comprised 13 per cent of India’s imports. By 2018-19, imports from Iran still accounted for $12.3 billion, or nearly 9 per cent of India’s crude intake.
This long-standing relationship underscores India’s more extensive history of engaging with sanctioned regimes.
Reliance now confronts a multi-tiered exposure:
o The 25 per cent U.S. tariff undermines its refining export margins and competitiveedge.
o The EU’s 18th sanctions package prohibits refined products derived from Russian crude-even when processed in neutral countries like India-putting its European markets at risk.
Multiple Russian-origin oil shipments destined for Reliance have been rerouted mid-voyage – including vessels such as the Tagor, Guanyin, and Tassos – amid mounting U.S. and EU sanctions.
This tariff regime erodes Reliance’s refining margins, undercuts profitability, and introduces severe uncertainty into its future energy strategy.
India’s historical import dependence on Iran-13 per cent in 2007-08 and still 9 per cent by 2018-19 – highlights the broader trend of the country’s diplomatic balancing act between energy security and geopolitical risk. This precedent sets the broader backdrop for Washington’s zero-tolerance approach to India continuing trade with sanctioned regimes.
Reliance’s refining strength, built on access to discounted Russian barrels and international export networks, now faces:
o Margin compression from tariff barriers,
o Market access loss in both the U.S. and EU,
o Logistical risk and reputation damage due to diverted shipments and toughened regulatory scrutiny.
Refined oil export only lags India’s USD 135 billion migrant worker remittance incomes as major source of forex.
