India US tensions keep getting more heated over Russian oil, as Washington warns of even higher tariffs

New Delhi/Washington, August 12, 2026: Somehow the India United States disagreement around India ties with Russia is back in the spotlight again , after a US official said President Donald Trump and Prime Minister Narendra Modi will work together to clear up the dispute tied to India purchase of Russian oil.

US Trade Adviser Peter Navarro said on Tuesday that Trump and Modi have a “very good” working relationship and he sounded pretty sure that the two sides would be able to settle the matter. This came as a US Senate bill , that could allow tariffs up to 100% on countries buying Russian oil moves ahead.

The core problem is basically rooted in India continued energy relationship with Russia. India has been one of the bigger customers for Russian oil and it turned into a meaningful part of its energy imports after the Russia Ukraine war started. Russian oil is also listed as one of India major imports from Russia, according to the Ministry of External Affairs.

Washington has argued, that when countries buy Russian oil , Russia earns more revenue while the war in Ukraine continues. India though, has kept saying it can safeguard its energy requirements and it will make choices according to its national interests. This has been a recurring headache point in India US relations over the past year, more or less.

The two countries had already signed off on a trade deal earlier this year. In February 2026, the White House said the US would drop an extra 25% tariff that had been added on Indian goods because of India Russian oil purchases, after India agreed to stop buying Russian oil.

However, this issue has somehow again become important after the US Senate advanced new legislation that could allow tariffs of up to 100% on countries that keep importing Russian oil. India’s Ministry of External Affairs confirmed last month that the proposed US legislation may influence those same importing countries, meaning it could also hit India.

The latest comments from the US side seem to indicate Washington still wants to settle the matter through talks. But at the same time, the prospect of far much higher tariffs has generated uncertainty for India’s exporters and, more broadly, for the economic relationship between the two countries, in a way that is a little hard to pin down right now.

For India, it’s not only a trade problem. it also points to a larger question about how New Delhi balances its ties with the United States and Russia. India and Russia still manage close cooperation in areas like energy, defence and commerce. They reported bilateral trade of $59.86 billion in the financial year 2025-26, with oil and petroleum products sitting among India’s major imports from Russia.

For now, a 100% tariff has not been imposed on India under this new proposal. The next steps will likely be based on how the US legislation moves forward, plus on what happens in the talks between the two countries.

The most recent statements coming out of Washington sort of show that despite the back and forth about Russian oil, both sides are still trying to find some path to guard, their bigger relationship ,even if its complicated. The next several weeks could also end up being important for India US relations, because both countries need to handle the Russian oil dispute in a careful way, but without letting it disrupt their broader commercial and strategic partnership.