The Pulse | Diplomacy | South Asia

Uncertainty Looms as US Sanctions Waiver for India Expires

The geopolitical uncertainties in the Gulf have created new opportunities for India and Russia to strengthen ties.

The Trump administration’s temporary lifting of sanctions on India for its purchase of Russian oil expired last week. However, there is little clarity over whether Washington will extend the waiver.

It was in August last year that U.S. President Donald Trump announced the imposition of a 25 percent punitive tariff on India for buying discounted Russian crude oil that he alleged was funding Moscow’s war against Ukraine. This was amid American efforts to bring Russia and Ukraine to the negotiating table.

The punitive tariff was in addition to the 25 percent tariff Washington had imposed on India months earlier for running a trade surplus with the U.S. Taken together, the 50 percent tariffs were among the highest imposed by Trump on any country other than Brazil, and it had a serious dampening effect on India-U.S. ties that had seen an unprecedented level of growth and warmth since the year 2000.

However, with the U.S and Israel attack on Iran on February 28, and Tehran’s subsequent decision to halt the passage of oil tankers through the Strait of Hormuz, the world was hit by a severe shortage of crude and a consequent surge in global oil prices.

Amid this crisis, the U.S. permitted a temporary waiver of sanctions on India, enabling it to purchase oil from Russia. “To ease the temporary gap of oil around the world, we have given them permission to accept Russian oil,” Trump said.

The waiver is helping India rework its energy ties with Russia. Indian state-run oil firms and private refiners, who had gradually reduced imports from Russia due to U.S. pressure in January this year, quickly reversed their strategy and began buying more oil from Russian companies.

Energy trade was a key subject on the talks table when Russian First Deputy Prime Minister Dennis Manturov visited New Delhi on April 2-3. Both Indian and Russian readouts on the visit confirmed this. The readouts also listed other areas for strengthening cooperation like trade, industry, energy, fertilizers, connectivity and mobility in addition to new opportunities in technology, innovation, and critical minerals.

The third-largest importer and consumer of oil in the world, India imports 85 percent of its crude oil requirements, with 50 percent of that coming from West Asia. It is also the world’s fourth-largest refiner and fifth-largest exporter of petroleum products, supplying refined fuel to over 150 countries. India’s daily crude oil consumption is 5.5 million barrels, a government statement said last month.

With energy supplies from West Asia hit hard by the Iran war, India has once again turned to Russia. This time though, India has had to pay substantially more for Russian energy than it did in 2022, when New Delhi picked up substantial quantities of discounted Russian crude after the start of the Ukraine war. Russian crude oil now costs more than Brent crude, according to a Reuters report.

India cutting its oil imports from Russia at the insistence of the U.S. did put New Delhi in a tough spot. On the one hand, India has had close ties with Russia for several decades. On the other hand, India was hard-pressed to keep relations with the U.S., an important strategic and trade partner, steady as it is still working out a trade deal with the Trump administration.

Trump agreed to drop tariffs to 18 percent after the trade deal was struck, and India reportedly extended private assurances to Washington that it would bring down oil purchases from Russia. Publicly, India has maintained that national interests alone would guide its decisions on purchasing oil from suppliers.

The U.S.-Israel war on Iran triggered panic in India over the shortage of LPG. However, India has not raised oil prices as dramatically as some other countries.

According to an Indian government statement, “through diversified procurement, the volumes secured currently exceed what would normally have arrived through the Strait of Hormuz during this period.” Through its strategy of diversifying its sourcing of crude, India now imports crude from 40 countries. Consequently, “about 70 percent of crude imports are now coming from routes outside the Strait of Hormuz compared with about 55 percent earlier,” the statement said.

This helped the Indian government keep fuel supplies and prices steady without large-scale disruptions, even as shortages have been reported from many other Asian countries.

However, uncertainty looms.

The Pakistan-brokered talks between the U.S. and Iran have failed. The 14-day ceasefire is under stress, not only because of Israel’s continuing military strikes on Lebanon but also, the collapse of the talks in Islamabad. The possibility of the war escalating in the coming days cannot be ruled out. Tehran, which had agreed to open up the Strait of Hormuz to allow ships to pass, has said it is closing the Strait again in response to Israel targeting Lebanon.

On Sunday, President Trump said that the U.S. Navy would begin stopping “any and all ships trying to enter or leave the Strait of Hormuz,” spiking uncertainty over any outflow of energy through the strait. Ships in international waters that would have paid a toll to Iran would also be stopped, Trump said.

Adding to these developments is the expiry of the sanctions waiver on India.

India has said it expects an extension of the reprieve.

India’s Foreign Secretary Vikram Misri, who was in Washington between April 8-10 for a “review the full spectrum of India–U.S. bilateral relations and advance ongoing cooperation across key areas,” according to an Indian Ministry of External Affairs statement, held discussions with several top American officials such as U.S. Secretary of State Marco Rubio.

Meanwhile, India’s Minister for Petroleum Hardeep Puri was in Qatar to discuss a possible resumption of liquefied natural gas (LNG) supplies. India imported 27 million tons of LNG in 2024-25, of which 41.4 percent came from Qatar.

The question is how soon can fuel exports from countries like Qatar and Saudi Arabia resume? Some reports suggest that the exports from Qatar could take till August to restart.

Given the magnitude of uncertainties clouding the energy landscape, it seems that India, which has always looked upon Russia as a friend in need, will have to rely on Moscow to meet its fuel requirements, perhaps even at the risk of incurring U.S. disapproval. It’s a role Russia seems ready to fulfill, reinforcing its image as India’s trusted partner in times of need.

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The Trump administration’s temporary lifting of sanctions on India for its purchase of Russian oil expired last week. However, there is little clarity over whether Washington will extend the waiver.

It was in August last year that U.S. President Donald Trump announced the imposition of a 25 percent punitive tariff on India for buying discounted Russian crude oil that he alleged was funding Moscow’s war against Ukraine. This was amid American efforts to bring Russia and Ukraine to the negotiating table.

The punitive tariff was in addition to the 25 percent tariff Washington had imposed on India months earlier for running a trade surplus with the U.S. Taken together, the 50 percent tariffs were among the highest imposed by Trump on any country other than Brazil, and it had a serious dampening effect on India-U.S. ties that had seen an unprecedented level of growth and warmth since the year 2000.

However, with the U.S and Israel attack on Iran on February 28, and Tehran’s subsequent decision to halt the passage of oil tankers through the Strait of Hormuz, the world was hit by a severe shortage of crude and a consequent surge in global oil prices.

Amid this crisis, the U.S. permitted a temporary waiver of sanctions on India, enabling it to purchase oil from Russia. “To ease the temporary gap of oil around the world, we have given them permission to accept Russian oil,” Trump said.

The waiver is helping India rework its energy ties with Russia. Indian state-run oil firms and private refiners, who had gradually reduced imports from Russia due to U.S. pressure in January this year, quickly reversed their strategy and began buying more oil from Russian companies.

Energy trade was a key subject on the talks table when Russian First Deputy Prime Minister Dennis Manturov visited New Delhi on April 2-3. Both Indian and Russian readouts on the visit confirmed this. The readouts also listed other areas for strengthening cooperation like trade, industry, energy, fertilizers, connectivity and mobility in addition to new opportunities in technology, innovation, and critical minerals.

The third-largest importer and consumer of oil in the world, India imports 85 percent of its crude oil requirements, with 50 percent of that coming from West Asia. It is also the world’s fourth-largest refiner and fifth-largest exporter of petroleum products, supplying refined fuel to over 150 countries. India’s daily crude oil consumption is 5.5 million barrels, a government statement said last month.

With energy supplies from West Asia hit hard by the Iran war, India has once again turned to Russia. This time though, India has had to pay substantially more for Russian energy than it did in 2022, when New Delhi picked up substantial quantities of discounted Russian crude after the start of the Ukraine war. Russian crude oil now costs more than Brent crude, according to a Reuters report.

India cutting its oil imports from Russia at the insistence of the U.S. did put New Delhi in a tough spot. On the one hand, India has had close ties with Russia for several decades. On the other hand, India was hard-pressed to keep relations with the U.S., an important strategic and trade partner, steady as it is still working out a trade deal with the Trump administration.

Trump agreed to drop tariffs to 18 percent after the trade deal was struck, and India reportedly extended private assurances to Washington that it would bring down oil purchases from Russia. Publicly, India has maintained that national interests alone would guide its decisions on purchasing oil from suppliers.

The U.S.-Israel war on Iran triggered panic in India over the shortage of LPG. However, India has not raised oil prices as dramatically as some other countries.

According to an Indian government statement, “through diversified procurement, the volumes secured currently exceed what would normally have arrived through the Strait of Hormuz during this period.” Through its strategy of diversifying its sourcing of crude, India now imports crude from 40 countries. Consequently, “about 70 percent of crude imports are now coming from routes outside the Strait of Hormuz compared with about 55 percent earlier,” the statement said.

This helped the Indian government keep fuel supplies and prices steady without large-scale disruptions, even as shortages have been reported from many other Asian countries.

However, uncertainty looms.

The Pakistan-brokered talks between the U.S. and Iran have failed. The 14-day ceasefire is under stress, not only because of Israel’s continuing military strikes on Lebanon but also, the collapse of the talks in Islamabad. The possibility of the war escalating in the coming days cannot be ruled out. Tehran, which had agreed to open up the Strait of Hormuz to allow ships to pass, has said it is closing the Strait again in response to Israel targeting Lebanon.

On Sunday, President Trump said that the U.S. Navy would begin stopping “any and all ships trying to enter or leave the Strait of Hormuz,” spiking uncertainty over any outflow of energy through the strait. Ships in international waters that would have paid a toll to Iran would also be stopped, Trump said.

Adding to these developments is the expiry of the sanctions waiver on India.

India has said it expects an extension of the reprieve.

India’s Foreign Secretary Vikram Misri, who was in Washington between April 8-10 for a “review the full spectrum of India–U.S. bilateral relations and advance ongoing cooperation across key areas,” according to an Indian Ministry of External Affairs statement, held discussions with several top American officials such as U.S. Secretary of State Marco Rubio.

Meanwhile, India’s Minister for Petroleum Hardeep Puri was in Qatar to discuss a possible resumption of liquefied natural gas (LNG) supplies. India imported 27 million tons of LNG in 2024-25, of which 41.4 percent came from Qatar.

The question is how soon can fuel exports from countries like Qatar and Saudi Arabia resume? Some reports suggest that the exports from Qatar could take till August to restart.

Given the magnitude of uncertainties clouding the energy landscape, it seems that India, which has always looked upon Russia as a friend in need, will have to rely on Moscow to meet its fuel requirements, perhaps even at the risk of incurring U.S. disapproval. It’s a role Russia seems ready to fulfill, reinforcing its image as India’s trusted partner in times of need.

Elizabeth Roche is Associate Professor at the Jindal School of International Affairs, OP Jindal Global University, Haryana, India.

India purchase of Russian oil

US sanctions on India

US waiver of sanctions

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