Will US-India Defense Relations be Impacted by India’s Trade With Russia?

The impending sale of P8-I Poseidon multi-mission maritime aircraft to India is likely to be the first test case.

By Ajai Shukla
The Diplomat
12th Aug 25

U.S. President Donald Trump’s announcement of an additional 25 percent tariff on India for its purchases of Russian oil crude oil will raise the total tariff on Indian imports to the United States to 50 percent—among the highest rates imposed by the U.S.

India doesn't "care how many people in Ukraine are being killed by the Russian War Machine," Trump had said earlier, accusing India of fueling Russia’s war on Ukraine. A subsequent White House statement said that India's imports of Russian oil were undermining U.S. efforts to end the war in Ukraine.

In India’s sharply polarized political landscape, there is very little agreement between Prime Minister Narendra Modi’s ruling Bharatiya Janata Party (BJP) and the Congress Party, which leads the opposition in Parliament. But in a rare show of unity on Monday, the two parties stood shoulder-to-shoulder as India’s Ministry of External Affairs (MEA) condemned President Donald Trump’s repeated criticism of New Delhi for continuing to trade with Moscow.

India-U.S. relations have frayed significantly in recent months. Trump’s repeated claims of having mediated an end to the India-Pakistan military clashes in May did not go down well in Delhi. The imposition of high tariffs on India has worsened ties further, raising questions over whether this will impact the robust bilateral security partnership and the growing defense trade. U.S. objections to India’s oil trade with Russia has raised eyebrows in New Delhi.

It was after the start of the war in Ukraine that the U.S. and EU started targeting India for importing oil from Russia. However, the MEA has pointed out that India began importing oil from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict. The U.S. at that time actively encouraged such imports by India for strengthening global energy markets. 

In its statement on Monday, the MEA said: “It is revealing that the very nations criticising India are themselves indulging in trade with Russia.” 

Indeed, in 2024, the EU’s bilateral trade in goods with Russia was worth 67.5 billion euros. In 2023, trade in services was estimated at 17.2 billion euros. This was significantly larger than India’s total trade with Russia that year or subsequently.

India’s defense trade with the U.S. is not only worth billions of dollars but also, it is surging. In 2005, India and the U.S. did no defense spending with each other. However, by 2020, U.S.-India defense trade hit $146 billion, and by 2025, it was expected to breach the $200 billion mark.

Instead, in early 2025, in a dramatic U-turn, the Trump administration reintroduced aggressive tariffs. India was included in the digital services tax war. Then came new restrictions on semiconductor cooperation. 

As Washington’s policies became more coercive, with tariff threats, sanctions and export bans piling up on India, New Delhi decided early this year to act in accordance with the principles of strategic autonomy. Indian strategic and business leaders shifted to strategic autonomy.

India is no longer willing to depend on President Trump’s mood swings. Even as the import of U.S. defense equipment to India was slashed, as India re-wrote procurement laws to block U.S. suppliers.

In many ways, it was a return of past animosities, dating back to the 1950s. Washington had long supported India’s anti-colonial struggles, but with India’s independence and the heating up of the Cold War, India’s strategic relationship with the U.S. turned bitterly argumentative, if not downright adversarial. In 1954, against the backdrop of the Cold War, the U.S. and six allies co-opted Pakistan into joining the Southeast Asia Treaty Organization (SEATO). While SEATO’s stated aim was to prevent communism from gaining ground in the region, its appeal for Pakistan was the military and diplomatic support it received from the U.S. in its struggles against India. In 1959, Cold War geopolitics led the U.S. to support Pakistan as a member of the Central Treaty Organization (CENTO). In 1972, the U.S. used Pakistani cover to send President Richard Nixon to China in a geostrategic coup that altered the course of the Cold War. In 1999, India’s nuclear tests evoked outright hostility from Washington as well as sanctions on the supply of defence equipment.

Not until the turn of the century did U.S.-India relations take a turn for the better. In 2005, a New Framework Agreement for the U.S.-India Defence Relationship was signed. The Pentagon and India’s Ministry of Defense (MoD) concluded the Defence Technology and Trade Initiative (DTTI) to bypass bureaucratic processes and procedures in both administrations. The so-called 123 Agreement opened the doors for civil nuclear cooperation between the two countries. 

In 2015, President Barack Obama and Prime Minister Narendra Modi signed a Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region, and in 2016, the U.S. designated India as a Major Defense Partner. In 2018, the bilateral security partnership reached a new level with the inaugural 2+2 Ministerial Dialogue—a cabinet-level meeting between American and Indian defense and foreign policy leaders. In 2018, the U.S. granted India Strategic Trade Authorization, Tier One status, enabling India to access many of America’s highly-regulated technology items, including the Predator and 

There is also the vitally important question of which branch or section of the U.S. establishment does an ally or partner country draw support from. It is the answer to this that ultimately determines the staying power of an ally or partner. For example, among the strongest and most influential branches of the U.S. administration are the four military services: the Army, Navy, air force, and the Marines. If one of these military services is backing the efforts of a partner country, or an allied service—for example, the Indian Navy—in an effort to obtain from the U.S. a weapon system such as the Sea Guardian drone, the obtainment of support from the U.S. Navy would be of vital help in inducing the U.S. Department of State in clearing the sale. Similarly, the backing of the U.S. Army would be almost essential in obtaining clearance for the sale of, say, Javelin anti-tank guided missiles to the Indian Army. This military-to-military relationship is extremely well-developed in the case of the U.S. military and the Indian military.

This leaves us with the important question: Are U.S.-India relations on firm ground? Or will they retain, and be guided by, a disruptive moral component, with Washington continuing to cite its democratic values, love of freedom and the rule of law at inconvenient moments? 

Eventually, the answer will be affected by three parameters: The depth and strength of the military-to-military cooperation, the quantity of defense sales to India, and the defense-industrial cooperation between the two countries. The impending sale of P8-I Poseidon multi-mission maritime aircraft is likely to be the first test case.