25 Percent Tariff : Even as US President Donald Trump continues to threaten reciprocal tariffs against India, he has now announced a bold new move that could directly affect India’s energy strategy. On Monday, Trump declared that the United States will impose a 25% secondary tariff on any country purchasing oil and gas from Venezuela, starting April 2, 2025, which he has termed as “Liberation Day in America.”
The decision is part of Trump’s efforts to penalize Venezuela for allegedly sending criminals and members of the Tren de Aragua — an organization officially designated as a Foreign Terrorist Organization — into the US.
What This Means for India
India had only recently resumed crude oil imports from Venezuela after a nearly three-year break, following the US easing of sanctions on the Latin American country in late 2023. Indian refiners, including Reliance Industries and Indian Oil Corporation (IOC), had restarted sourcing Venezuelan crude, attracted by favorable pricing.
However, Trump’s latest move could disrupt India’s diversified energy sourcing plan, increasing costs for Indian refiners. The secondary tariff effectively punishes countries by adding a 25% tariff on any trade they conduct with the US if they continue buying Venezuelan oil.
In a strongly worded statement, President Trump said:
“Therefore, any Country that purchases Oil and/or Gas from Venezuela will be forced to pay a Tariff of 25% to the United States on any Trade they do with our Country. All documentation will be signed and registered, and the Tariff will take place on April 2nd, 2025, LIBERATION DAY IN AMERICA.”
Why India Should Be Concerned
Higher Refining Costs: Indian refiners will face price volatility and potential penalties.
Trade Complications: The tariff could complicate broader Indo-US trade ties, especially with the reciprocal tariff threat already looming.
Supply Strategy Impact: India’s efforts to maintain affordable and diverse energy sources could be disrupted.
With the deadline approaching fast, the Indian government and major oil players like Reliance Industries will likely have to re-evaluate their Venezuelan sourcing plans, as the cost implications of continuing those purchases could outweigh the benefits.
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