US trade officials have informed their Indian counterparts that cutting back on Russian oil imports is key to lowering India’s tariff rates and finalising a trade agreement, sources familiar with the talks told Reuters.

A US official said the trade discussions are moving in a positive direction, but more effort is needed. The official highlighted that India still needs to address US concerns on market access, the trade deficit, and its Russian oil purchases.

US President Donald Trump has sought to pressure India, the European Union and members of NATO to curb purchases of Russian oil as a way to cut Moscow’s revenue and hasten an end to the war in Ukraine.

The Trump administration has shown a willingness to use maximum leverage to advance its policy goals, as evidenced by its linking trade negotiations with India to demands that it curb Russian oil purchases.

Trump has expressed growing frustration over the slow progress toward ending Russia's war in Ukraine, a conflict he pledged to resolve from his first day in office.

The US has imposed an extra 25% tariff on imports from India to pressure New Delhi to halt its purchases of discounted Russian crude oil, bringing total punitive duties on Indian goods to 50% and souring trade negotiations between the two democracies.

But Trump has refrained from imposing additional tariffs on Chinese imports over China's purchases of Russian oil, as his administration navigates a delicate trade truce with Beijing.

India and China are the two largest buyers of Russian oil, which is already subject to numerous US sanctions that have constrained Moscow’s access to global markets.

In response, India has defended its oil imports, emphasising the economic benefits and accusing Western nations of hypocrisy for continuing trade with Russia despite sanctions.