India–US Trade Deal Could Include Oil Bargain, Says New Jersey Governor

 

India-US Trade Talks Could Lead to Oil Bargain, Says New Jersey Governor

The future of India–U.S. trade relations may involve more than just resolving tariff disputes. According to New Jersey Governor Phil Murphy, a senior Democratic leader and vocal critic of President Donald Trump’s trade policies, both nations could strike a broader deal that includes oil as part of the negotiations.

Speaking on Wednesday, Murphy suggested that while there is room to compromise on the stiff tariffs currently weighing down bilateral trade, the talks could evolve into a “grand bargain” that extends to the energy sector.

The backdrop to this is Trump’s recent decision to impose a 25% penalty tariff on India for continuing to import oil from Russia. The move was part of Washington’s wider push to penalize countries seen as helping Russia bypass Western sanctions. But for India, which relies heavily on energy imports to meet its growing demand, Russian oil has been an affordable and vital option.

Murphy, who has often positioned himself against Trump’s hardline economic policies, made it clear that he disagreed with the idea of punishing allies like India with high tariffs. “When it comes to the India–U.S. trade deal, there will be a landing place on tariffs,” he said, adding that the solution may not be as simple as lowering taxes on goods. Instead, the governor hinted at a more strategic compromise that ties together trade, energy, and broader geopolitical interests.

The Tariff Tussle

India and the U.S. have had a bumpy trade relationship in recent years, with disputes ranging from agricultural products to tech and pharmaceuticals. Trump’s tariffs — especially the latest ones on oil imports — have added more friction. For Washington, the tariffs are a way to apply pressure; for New Delhi, they are seen as unfair punishment, especially given India’s role as a long-time U.S. partner in Asia.

The 25% tariff in particular stings because of India’s unique energy needs. As the world’s third-largest oil importer, India cannot easily replace Russian crude without driving up domestic fuel prices. While the U.S. would prefer India to shift more of its purchases to American suppliers, the sudden cost jump makes it difficult for New Delhi to comply.

Oil at the Center of the Deal

This is where Murphy’s idea of a “grand bargain” comes in. Instead of wrangling endlessly over tariffs, the U.S. and India could negotiate an arrangement that involves long-term commitments on energy. For instance, India could agree to increase imports of American oil and gas, while the U.S. could ease tariffs on other goods or services important to New Delhi. Such a compromise could balance both nations’ economic and strategic priorities.

Energy trade is already becoming a pillar of the India–U.S. relationship. In recent years, India has significantly increased imports of liquefied natural gas (LNG) and crude oil from the U.S., diversifying its energy basket. A formalized bargain could lock in those trends while easing the current tension over Russian supplies.

Looking Ahead

Murphy’s comments underline a growing split in Washington over how best to deal with allies like India. While Trump sees tariffs as leverage, critics argue that such heavy-handed tactics risk alienating partners at a time when global cooperation is vital.

For India, the big question is whether Washington is willing to recognize its energy realities. Any grand bargain will need to acknowledge that India cannot abruptly cut ties with Russian oil without major economic costs. But if the U.S. offers a fair deal — lower tariffs, more access to American energy, and perhaps concessions in other trade areas — there may be a path forward.

As the world watches the unfolding U.S.–India talks, Murphy’s suggestion adds a new dimension: this may not just be about tariffs and trade but also about reshaping the global energy equation.

India Claps Back at Trump’s Tariff Hike Over Russian Oil Trade: MEA Calls Criticism 'Unjustified'

 

India Responds Strongly as Trump Hikes Tariffs Over Russian Oil Trade

In a move that has further strained U.S.-India trade relations, former U.S. President Donald Trump has once again raised the temperature in the ongoing tariff dispute, targeting India’s oil imports from Russia. Trump recently announced that tariffs on Indian imports to the U.S. would be "substantially" increased, accusing India of profiting from buying and reselling Russian oil while the war in Ukraine continues. However, this latest round of rhetoric has not gone unanswered, with India forcefully pushing back against the accusations and highlighting what it sees as hypocrisy from both the U.S. and Europe.

Trump’s recent remarks were made on his social media platform, Truth Social, where he claimed that India is not only purchasing large quantities of Russian oil, but also selling much of it on the global market for significant profit. “They don’t care how many people in Ukraine are being killed by the Russian War Machine,” he wrote, announcing his decision to increase tariffs on Indian goods entering the U.S.

But here's the key point that's often lost in such statements: tariffs are not paid by the exporting country—in this case, India. They’re actually paid by the importers in the United States. So, when Trump says "India will pay," what it really means is that American businesses and, eventually, consumers are the ones footing the bill.

India’s Ministry of External Affairs (MEA) didn’t hold back in its response. It pointed out that the U.S. had, in fact, encouraged India to import Russian oil after the Ukraine conflict began in 2022. At that time, European countries were scrambling for alternatives, and Russian supplies were diverted elsewhere—including to India. The MEA emphasized that India’s decision to increase Russian oil imports was driven purely by the need to ensure stable and affordable energy prices for Indian consumers during global instability.

Calling the criticism “unjustified and unreasonable,” the MEA highlighted that both the U.S. and European Union continue to maintain far more substantial trade relationships with Russia. For instance, in 2024 alone, the EU recorded over €67.5 billion in goods trade with Russia, along with an estimated €17.2 billion in services trade. That’s far beyond India’s total trade with Moscow.

As for the U.S., it remains a regular importer of several key Russian products including uranium for nuclear power, palladium used in electric vehicles, and essential fertilizers and chemicals. The Indian government made it clear that while India’s energy purchases from Russia are a matter of necessity, Western countries continue their trade out of economic preference—not compulsion.

India’s Commerce and Industry Minister, Piyush Goyal, addressed Parliament shortly after Trump’s announcement, stating that the government was closely analyzing the potential impact of the new tariffs. He assured that consultations with domestic industries were underway, and that the country would take all necessary steps to protect its economic interests.

The 25% tariff, which is set to take effect from August 7, will put India at a competitive disadvantage, especially compared to countries like Vietnam, Mexico, Indonesia, and the Philippines, who enjoy more favorable trade terms with the U.S.

Trump’s justification for the move goes beyond oil, as he also cited India’s military equipment purchases from Russia and what he described as “obnoxious” trade barriers. This marks a renewed phase of tension in the already complex U.S.-India trade relationship.

In the end, India’s position is clear: while it remains open to fair trade and strategic partnership, it will not accept being singled out for actions that other major economies continue to engage in on a much larger scale. The country is preparing for the impact and is determined to safeguard its national and economic interests in the face of rising pressure.