US–India trade fallout: What’s at stake for commodities?

This article assesses India’s imports from the US and evaluates the feasibility of replacing these supplies in the event of retaliation.

Washington has threatened to add another 25% tariff on India effective August 28, on top of the 25% tariff effective from August 1. Goods affected include textiles, footwear, gems (especially diamonds), and jewelry, as well as marine products (especially shrimp). Notably, pharmaceuticals are currently exempt. India could therefore, together with Brazil, face the highest US tariffs of up to 50%.

This measure aims to penalize India for continuing to buy Russian energy commodities, most importantly crude oil. So far, the Indian government has refrained from issuing any directive to halt Russian crude imports, a stance supported by robust import flow data. Nevertheless, Indian refiners have already issued more tenders for non-Russian crude for September–October delivery.

India’s commodity exports to the US are minimal, including 53 kbd of blending components in 2024 or occasional seasonal gasoline flows to the US West Coast. However, at 44.3 Mt in 2024, Indian imports of US commodities are significant. For comparison, China, the largest recipient of seaborne US commodities, imported 90 Mt in 2024.