Trade tensions between India and the United States appear to be entering a new phase as Washington launches a sweeping investigation into “unfair trade practices” involving 16 major economies, including India.

The probe, conducted under Section 301 of the US Trade Act of 1974, comes at a time when geopolitical and energy considerations are increasingly shaping bilateral economic ties.

Under Section 301, the United States Trade Representative (USTR) has the authority to investigate foreign trade practices that may harm American industries. If violations are found, the US government could impose tariffs or other trade restrictions on the countries under scrutiny.

The investigation came shortly after US President Donald Trump and Prime Minister Narendra Modi announced a new trade framework to expand bilateral trade and resolve long-standing disputes.

However, US officials have indicated that the ongoing negotiations will not prevent enforcement action if the probe identifies unfair practices.

India currently exports more than $100 billion worth of goods annually to the United States, making it one of Washington’s largest trading partners.

Key sectors that could face scrutiny include electronics, engineering goods, metals, and solar equipment—industries that have seen rapid growth in exports to the American market in recent years.

Russian oil imports add complexity

At the same time, India’s energy relationship with Russia has become an important factor in the broader geopolitical equation. Since the start of the Ukraine war and Western sanctions on Moscow, India has emerged as one of the largest buyers of discounted Russian crude.

Even as pressure from Washington increased earlier this year, Indian refiners continued purchasing Russian oil. Russia accounted for roughly 30–40% of India’s crude imports at times over the past few years, significantly higher than pre-war levels.

More recently, the United States issued a temporary 30-day waiver allowing Indian refiners to buy Russian crude that was already stranded at sea due to sanctions and shipping disruptions. The move was intended to stabilise global energy markets amid rising prices and supply shocks.

Following the waiver, Indian companies reportedly moved quickly to secure available cargoes, purchasing millions of barrels of Russian crude that were already positioned in Asian waters.

In March alone, India’s largest private refiner purchased about six million barrels of Russian oil as supply disruptions in the Middle East pushed buyers to look for alternative sources.

Global supply shocks reshape energy flows

Disruptions have also influenced the renewed focus on Russian crude in Middle Eastern energy routes. Escalating tensions in the Strait of Hormuz, a key chokepoint for global oil shipment- have threatened nearly half of India’s crude supply routes.

With shipping risks rising in the region, India has been diversifying its sources of crude, including turning once again to Russian supplies that can be transported through alternative maritime routes.

At the same time, the US administration has been weighing whether easing certain sanctions on Russian oil could help cool global prices and prevent further supply shortages.

Analysts say this complex dynamic illustrates the delicate balancing act facing both Washington and New Delhi. While the United States wants to enforce trade rules and maintain pressure on Russia, it must also consider the stability of global energy markets and the economic impact on key partners like India.

Strategic partnership under strain

For India, maintaining affordable energy supplies remains a priority as the world’s third-largest oil importer. Russian crude, often available at discounted prices, has helped Indian refiners manage costs while supporting domestic fuel supply and exports of refined petroleum products.

However, the US investigation under Section 301 signals that trade frictions may intensify in the coming months. If tariffs or restrictions are imposed, Indian exporters could face new challenges in one of their most important markets.

Diplomats and trade experts say the coming negotiations between the two countries will likely focus not only on market access and tariffs but also on the broader strategic issues linking trade, energy security, and geopolitics.

With India continuing to balance its relationships with both Washington and Moscow, the evolving dynamics of trade and energy flows are expected to remain at the centre of global economic discussions.